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Dangote Refinery To Boost Nation’s External Reserves

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The completion of Dangote refinery would help in boosting nation’s external reserves as it would turn the country into petroleum products export nation.

The new refinery would 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.

When it becomes operational, Dangote refinery would aid the country with about $7.5 billion dollars forex savings on importation.

The group executive director, Dangote Refinery, Devakumar Edwin, said the construction of the 650,000 barrels of crude oil per day Dangote refinery was expected to help Nigeria save over $7.5 billion through import substitution, saying that the project, would put Nigeria on the global map as major oil and gas hub in Africa.

Nigeria currently imports large amount of its petroleum products due to the inability of the country’s refineries to utilise their full capacity. For example, the National Bureau of Statistics (NBS) latest data showed that the downstream of the Nigerian oil and gas sector imported N812billion of premium motor spirit (PMS) during the first quarter of 2018.

According to NBS, the country imported N349.45 billion worth of PMS in the month of March 2018, representing the highest volume of petroleum products import during the quarter under review.

Specifically, the petroleum products importation statistics for first quarter 2018, reflected that 5.67 billion litres of PMS, 954.47 million litres of automotive gas oil (AGO); 66.914 million litres of household kerosene (HHK); and 5122.067 million litres of aviation turbine kerosene were imported into the country in first quarter of 2018.

According to NBS, the month of March 2018, recorded the highest volume of PMS imported into the country at 2.41 billion litres, while the highest volume of AGO and HHK were imported in February and January 2018 respectively. This continuous importation of petroleum products has exerted undue pressure on the nation’s external reserve and induced depreciation of the naira.

Edwin said that the Dangote refinery therefore would help the federal government create a robust domestic refining sector that could reduce petroleum products imports and save the country from capital flight.

He stated, “The refinery is going to save a huge amount of foreign exchange out flow because, today, forex is being used in the importation of petroleum products and our foreign reserves are being heavily depleted. And whatever little forex we are earning from the sale of crude oil, is being used to import petroleum products. Our petroleum refinery is going to have a major beneficial impact on the economy in terms of foreign exchange savings.

“Secondly, the demand for Nigeria’s crude oil has reduced with the introduction of shale oil into the market. Shale oil is equally as good as the Nigerian crude and it is available in substantial volumes. Our biggest consumers like China and India have reduced their demand because they could get similar products. Even earlier, they had started focusing on heavier crudes because they believed that they could make more money. Our refinery will give an assured market for the Nigerian crude.”

Speaking on the refinery update, he said, “We are currently building the world’s largest single line refinery, petrochemical complex and the world’s second largest urea fertiliser plant.

“The refinery will have the capacity to refine 650,000 barrels of crude oil per day. The petrochemical plant will produce 780 KTPA polypropylene, 500 KTPA of polyethylene while the fertiliser project will produce 3.0 million metric tonnes per annum (mmtpa) of urea.

“In addition, we are also building the largest sub-sea pipeline infrastructure in any country in the world, with a length of 1,100km, to handle 3 billion SCF of gas per day. We also plan to construct a 570 MW power plant in this complex. As a matter of fact, gas from our gas pipeline will augment the natural domestic gas supply and we estimate an additional 12,000MW of power generation can be added to the grid with the additional gas from our system.

“We will be adding value to our economy as all these projects will be creating about 4,000 direct and 145,000 indirect jobs. We will also save over $7.5billion for Nigeria annually, through import substitution and generate an additional $5.5 billion per annum through exports of the refined petroleum products, fertiliser and petro chemicals.”

He said the company has been championing a comprehensive overhaul of the energy sector in Nigeria, with a view to making it a self-reliant nation.

He attributed Dangote’s decision to invest massively in refinery to strong desire to help transform the industry into a veritable driver of national economic growth and industrialisation.

“We are confident that public policy will continue to move in the direction that will expand the space for private sector to assume leadership in the economic development arena,” he added.

At this year’s Ghanaian International Petroleum conference (Ghipcon 2018) held in Accra, Ghana, participants at the international conference as well as oil distributors and marketers from various countries were eager to know how they could key in for supplies from the 650,000 barrel per day refinery that is preparing to take the continent by storm.

The Ghanaian government expressed the view that dealing with Dangote refinery for petroleum import would be a better business for African nations than depending on the international market for the supply of refined petroleum products.

President of Ghana, Nana Akufo-Addo, who was represented by Vice-President Alhaji Mahamud Bawumia, said African nations are anxiously waiting for Dangote Refinery.

Dangote Oil Refinery Company is projected to be the world’s biggest single-train facility, upon completion in 2019. The refinery would produce Euro-V quality gasoline and diesel, as well as jet fuel and polypropylene. The project is expected to generate 9,500 direct and 25,000 indirect jobs.

The refinery would produce an annual refining capacity of 10.4 million tonnes (Mt) of gasoline, in addition to 4.6Mt of diesel and 4Mt of jet fuel. It would also produce 0.69Mt of polypropylene,0.24Mt of propane, 32,000t of sulphur and 0.5Mt of carbon black feed.



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