Dangote assures Nigerians of timely completion of refinery

Nigerian billionaire Aliko Dangote, says he’s on schedule to finish his $15 billion oil refinery, which will be one of the world’s biggest, by next year.

Analysts have questioned whether Dangote, worth $10.8 billion according to the Bloomberg Billionaire’s Index, will be able to finish such a massive project on time and within costs.

Speaking on the sideline at a conference in Paris, Dangote said the plant, which is being built in Lagos, and is designed to process 650,000 barrels of crude daily will be ready by 2020.

The 61-year old billionaire told journalists that despite the challenges, the project is on course, and is expected to export about 35 percent of what the refinery produces.

The complex will include a $2.5 billion fertilizer factory, set to be completed this year, and a petrochemical plant. They will be powered by gas, which will be sent from the Niger River delta via two 550-kilometer (341-mile) underwater pipelines, which will also cost Dangote about $2.5 billion.

“It will be tough,” said Jeremy Parker, a consultant at London-based CITAC, which analyzes Africa’s energy sector. “There are many risks. Refining is a competitive and volatile industry.”

Dangote has bought almost 300 cranes and built a jetty for ships bringing in equipment. One piece, a 94-meter-high (300 feet) column used to distil crude into different products, weighs 2,310 metric tons, equal to 400 elephants.

“It’s a logistics nightmare,” said Edwin. “No roads, no bridges can handle that kind of thing.”

The refinery will produce around 50 million liters (13.2 million gallons) a day of gasoline, which will easily meet the needs of the continent’s most-populous nation of 200 million people, and one-third as much diesel.

The company’s been talking to traders including Royal Dutch Shell Plc, Vitol Group and Trafigura Group Pte about them supplying oil and buying refined products, he said.

Once ready, it will significantly reduce fuel imports not just to Nigeria — whose decrepit state-owned refineries operate at a fraction of their capacity — but to West Africa as well, according to Salih Yilmaz, an analyst at Bloomberg Intelligence in London.

“The sheer scale, and the fact it’s Nigeria’s first Greenfield refinery in thirty years, will make the project challenging,” said Johnny Stewart, an analyst at Edinburgh-based oil and gas consultancy Wood Mackenzie. “We expect the project to come online during 2022 at a higher cost than currently reported.”

When Nigerian Oil Minister Emmanuel Ibe Kachikwu visited the site last year, he urged the company to hurry up and said President Muhammadu Buhari would be “absolutely enthused” if it were completed in time for elections next February.