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Dangote $11bn Refinery Raises Fresh Hope For Indigenous Shipowners

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Aliko Dangote

Indigenous shipowners have expressed optimism in the much expected $11 billion Dangote Refinery and Petrochemical Plant in Ibeju-Lekki, Lagos, which they say raises fresh hope of survival for them as they expect freights from the refinery to other parts of the country and abroad would be handled by Nigerian vessels in line with local content policy of the federal government.

The refinery will produce 650,000 barrels per day of refined petroleum products to meet Nigeria’s refined petroleum products needs as well as export to other countries. Experts however said when the refinery comes on stream in 2019 as projected, it will provide businesses for indigenous shipowners who would be engaged in the movement of crude and refined products locally and internationally.

LEADERSHIP recall that the Nigerian Maritime Administration and Safety Agency (NIMASA) recently released the Nigeria’s Maritime Industry Forecast 2018–2019, which projected that oil tanker fleet size will increase by 1.7 percent in 2019.

Speaking exclusively with LEADERSHIP yesterday, president, Nigerian Shipowners Association (NISA), Alhaji Aminu Umar, said the refinery would create businesses opportunities for indigenous carriers. He said: “When it eventually comes on stream, it will be positive because it will help our local shipowners.

“If you look at it, Dangote refinery production has a capacity of about 650,000 barrels a day and when it comes on stream, it will cover about 50 percent of the demand for oil in Nigeria. If that covers up to 50 percent of the product demand or supply in this country, then, it will be very good for local shipowners because the cargoes will not be transported or removed from the refinery with trucks but by ships to the various depots all over the country.”

He also explained that when it comes on stream, local shipowners will see lots of cargoes moving and coming from Dangote refinery to other oil depots or to NNPC designated depots that may be buying from Dangote on behalf of Nigerians marketers. He expressed optimism that Nigerian flagged vessels will be employed to move export cargoes out of the refinery.

In Addition to that, Umar said there will be movement of crude. “We don’t know what Dangote plans are whether he will be using ‎pipelines to move cargoes or be using Very Large Crude Carrier (VLCC) from the crude terminal to his refinery.  However, in addition to the crude, there are other intermediate products that are there in the refinery apart from petrol, diesel and kerosene.

“There are other products to be exported out of the refinery and since it is a Nigeria refinery, most likely, vessels will be taken from here to freight the other products out of the refinery abroad, so, you will see Nigeria shipowners getting business to deliver cargoes to other countries in the world wherever Dangote is selling its export products. Nigeria shipowners will have the advantage to deliver those cargoes.’’

When asked whether indigenous shipowners have the capacity to move cargoes abroad, Umar said, “the capacity is there. You will be surprised that Dangote himself will buy ship and be a shipowner. We know he has the capacity to buy all kinds of ships he wants to buy, so, he might likely be investing in shipping and buy ships that will be transporting his crude.’’

Umar, who is the managing director of Seatransport Services Nigeria Limited, an indigenous shipping company, said indigenous shipowners operating in the downstream oil sector have been operating in West Africa, but with the coming of Dangote Refinery in 2019, it would open a new route for them beyond the West African coast.

“Today, the tanker owners are doing West Africa to Nigeria, that is, the vessels are chartered to load cargo from a West Africa offshore vessel into a Nigerian seaport and no Nigerian Shipowners have a ship that has the capacity to load from the refinery in Europe or Arabian Gulf to Nigeria.

So, if we look at it, if Dangote is coming in with 50 percent of the entire business that is supposed to be coming from Europe, then Nigerians will gain additional 50 to 60 percent of that freight and that will definitely have tremendous  positive impact on Nigerian shipowners,” he said.


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