By Franklin Ocheneyi
“THE world is waiting for Dangote Oil Refinery project to bail Nigeria out from the clutches of importation of petroleum products.”
That’s how the President, Lagos Chamber of Commerce and Industry (LCCI), Mr. Babatunde Paul Ruwase, aptly summed up the expectations of Nigerians from different walks of life, as the Oil Refinery project nears completion in 2020.
Ruwase, who led members of the chamber on a tour of the facility expressed excitement over the pace of work at the Refinery and described the investment as “A game changer for the Nigeria oil sector.”
He commended the President/Chief Executive of Dangote Group, Alhaji Aliko Dangote for the enormous investment and said “This project is the first of its kind. There is no investor in Nigeria that has developed the courage to come up with such gigantic project. From what we have seen on ground, it shows that the project is a reality and it is possible for Nigeria to become exporter of petroleum product.”
In the same vein, commendation also came from Nigerian Content Development and Monitoring Board (NCDMB).
Engr. Simbi Wabote, its Executive Secretary, said: “The Dangote Refinery project is expected to close a major gap in the supply of petroleum products in the country. We consider this as a very important project and we are willing to partner with the company to ensure full implementation of the local content policy.
Reasons for the investment
Recall that for nearly 30 years now, the country has been struggling to regain its status as an oil exporter but to no avail.
The Port Harcourt Refinery has capacity to produce 10. 500 million mt/y (metric tonnes per year) of refined products but it is producing at less than 20 per cent of this capacity.
Similarly, the Kaduna Refinery, built in 1980, has capacity to produce 5.5 million mt/y (110,000 b/d) while Warri Refinery, built in 1978, has capacity to produce 6.2 million mt/y (125,000b/d) of refined products.
When Mr. Dangote initially unveiled his refinery plans in 2016, he said its aim was to challenge the status quo, which had seen the government spend about $5.8 billion to import petroleum products over the past year. Dangote said that the project would save the country about $7.5 billion annually in foreign exchange being used to import petroleum products and also generate $5 billion foreign exchange earnings annually.
The plant, according to him, will generate over 100,000 employment opportunities and revive over 11,000 filling stations that had been shut due to shortage of products. Dangote said that the refinery would crash the price of petrol products in Nigeria as the products would be refined locally and save some costs incurred in importation.Antony Goldman, the co-founder of the London-based Nigeria specialists ProMedia Consulting, noted: “The failure to produce refined products over the last 25 years has created a huge architecture of graft and corruption around everything.”
Nevertheless, the Dangote Oil Refinery project when completed and successful is expected to turn Nigeria from an importer of refined products into an exporter of the commodity.
Executive Director Devakumar Edwin, who oversees the project, said: “Ninety-five percent of engineering has been completed, 90 percent of procurement has been completed.”
“We started civil works in July last year and we have scheduled 2-1/2 years for mechanical completion,” he said, referring to the point where a plant is ready to be handed over for commissioning.
“Aliko Dangote himself had said he hoped to finish building the refinery, which will cost between $12-14 billion in 2019 and to start production in early 2020.”
In the light of the foregoing, it is, therefore, good news that Nigeria will now host one of the largest refineries in the world after the Jamnagar Refinery in Gujarat, India which is the largest refinery in the world and produces 1,240,000 barrels per day.
The Dangote Refinery will be the biggest in Africa taking over from the South Africa’s Sapref Refinery producing 180,000 barrels per day and Cairo’s Mostorod Refinery with a capacity of 142,000 barrels per day.