The Dangote Oil Refinery Company has reportedly secured about 200,000 barrels per day crude oil, about six ship loads from Nigeria National Petroleum Corporation NNPC Ltd , for the test run of it’s 650,000 barrels per day refinery located in Lekki area of Lagos State.
The test run, according to officials in Dangote Refinery, will begin in December, this year.
Aliko Dangote, Africa’s richest man and promoter of the refinery had promised during its commissioning that the facility estimated to have cost over $18 billion would begin production of diesel and aviation fuel by July.
This, however, could not happen because the NNPCL could not supply the company the required feed stock for the expected test run.
Nigerian Upstream Petroleum Regulatory Commission (NUPRC), an arm of the NNPC involved in regulation said it was committed to effective implementation of the Petroleum Industry Act (PIA 2021) for the sector to contribute more to national economy.
The commission said it would ensure that relevant sections of the PIA that affect its operations are duly implemented, including the domestic crude oil supply to licensed refineries in Nigeria.
Apart from the Dangote Refinery, five other modular refineries are affected by the unavailability of crude oil for their production.
The Dangote Refinery is expected to start producing up to 370,000 barrels per day of diesel and jet fuel but an earlier production target failed to materialize owing to non availability of crude.
It is expected that once the refinery begins operation, it will be able to bridge the local consumption gap while also making the country a net exporter of fuels.
NNPC sources said the crude would be supplied in December as part of a one-year deal, adding that volumes in future months would be supplied “based on mutual agreement and availability”.
Some other sources said about 4-5 cargoes, or at least 130,000 bpd, will subsequently reach Dangote Refinery.
It was learnt that the agreement between Dangote and NNPCL is still shrouded in secrecy
A Dangote source said “some of the agreements have confidentiality clauses.”
The NNPC official said gasoline and diesel purchases from the refinery would be negotiated in separate contracts at a later date. NNPC has a 20% stake in the refinery.
The Dangote refinery was commissioned by former Nigerian President, Muhammad Buhari before his exit in May this year.
The refinery is already running behind schedule after initial take off dates had been missed severally. It was initially projected to cost between $12-14 billion, but the cost has risen to about $19 billion.
Experts say it can take months for refineries to move from test runs to producing high-quality fuels at full capacity.