The Dangote Petroleum Refinery is expanding its storage capacity for imported crude oil by building eight additional tanks, according to a report by Africa Report. The refinery is increasing its storage capacity by 6.29 million barrels, equivalent to 1 billion liters, in an effort to stockpile imported crude oil due to unreliable local supplies.
The $20 billion refinery is planning to import crude oil from other countries, as the supply from the Nigerian National Petroleum Company Limited (NNPC) has been inconsistent. Officials from the refinery stated that the low crude supply from the NNPC is driving the refinery's dependence on imports.
The construction of the eight additional tanks will increase the refinery's crude storage capacity by 41.67% to 3.4 billion liters. "Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher," said Devakumar Edwin, Vice President of Oil and Gas Business at Dangote Industries. "So, we have started building eight additional crude tanks to hold a billion liters, over and above our original storage capacity. Four of them are nearing completion."
The refinery currently has 20 crude storage tanks with a capacity of 120 million liters each, totaling 2.4 billion liters. Its refined product tanks have a total capacity of 2.34 billion liters. Dangote began producing diesel and aviation fuel in January 2024 and petrol in September, with products supplied to the domestic market and exported to several countries.
Edwin described the supply of crude oil from the NNPC to the Dangote refinery as "still very low." Nigeria, which is Africa's largest oil producer, was importing its fuels until last year when the Dangote refinery came online. The NNPC's Warri and Port Harcourt refineries have resumed operations, indicating that the company will have to supply crude to these facilities in addition to the percentage committed to servicing its loans.
Nigeria has continued to struggle with underinvestment and production outages caused by theft and pipeline vandalism, which have seen it lose its top spot in Africa several times in recent years. However, the Nigerian Upstream Petroleum Regulatory Commission reported that crude production reached 1.45 million barrels per day in November, 99% of its 1.5 million barrels per day OPEC quota.
The decision by Dangote to expand its storage facilities for imported crude may indicate that the naira-for-crude deal ordered by President Bola Tinubu is fading out gradually. Before President Tinubu ordered the sale of crude to the Dangote refinery in August, the facility had faced months of crude shortages. The President of the Dangote Group, Alhaji Aliko Dangote, accused international oil companies of planning to sabotage the refinery by refusing to supply crude oil.
On July 29, the Federal Executive Council approved a proposal by Tinubu for the NNPC to sell crude oil to local refineries in naira. The implementation of the initiative started on October 1, with the NNPC expected to commence the supply of about 385,000 barrels per day of crude oil to the Dangote refinery to be paid for in naira. Aliko Dangote said in December that the naira-for-crude deal has led to a reduction in prices of petroleum products in the country.
Currently, the Dangote refinery is ramping up production as its petrol gains momentum among Nigerian vehicle owners.
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