Nigeria’s Dangote refinery, the biggest in Africa, is gearing up to bring in crude from the US in the next few months.
According to insiders, Trafigura Group has reportedly sold 2 million barrels of WTI Midland to the Dangote refinery for delivery at the end of February, as reported by Bloomberg.
This transaction represents a noteworthy shift for the refinery, as it is the first instance of procuring crude oil from sources outside of Nigeria. The surge in US oil supply over the past decade has had a profound impact on the global market, reaching regions as far as Asia. This development is particularly significant for Nigeria, the largest economy in Africa, which heavily depends on petroleum exports.
A few weeks ago, the Dangote oil refinery successfully commenced the production of diesel and aviation fuel after encountering construction delays over the years at its $20 billion facility. The refinery secures domestic crude through a supply agreement with the trading arm of the state-owned Nigerian National Petroleum Co. The first crude delivery occurred on December 12, 2023, and the sixth cargo was delivered on January 8, 2024.
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The initial cargo received at the plant was Nigeria’s Agbami crude, sold by a trading unit of Shell Plc. Subsequently, the refinery received more Nigerian barrels, including Amenam, Bonny Light, and CJ Blend streams.
In addition to processing domestic feedstock, the expansive facility is designed to handle various African crudes and sources from afar, including the US and Saudi Arabia, according to statements from the Dangote Group. Gasoline production is anticipated to commence by March, according to reports from The Guardian over the weekend, citing statements from Dangote himself.