The Nigerian National Petroleum Corporation (NNPC) has announced its intention to purchase a 20% minority equity position in Africa’s largest oil refinery, the Dangote Refinery in Lagos.
This is to help further ensure an undisrupted supply of petroleum products across the country when the transaction pulls through.
This disclosure was made by NNPC Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, while speaking at the end of a 2-day Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021, tagged: “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry.”
According to Thisday, Yakubu said discussions were already ongoing with the Dangote Group for the acquisition of the stake.
What the NNPC Chief Operating Officer, Refining and Petrochemicals, is saying
Yakubu, at the virtual event, stated that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the negotiations with Dangote Refinery.
“We have what we call the Greenfield refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC.
What we do, our strategy is to collaborate and seek strategic partnerships with private investors.
At the moment, we have Dangote Refinery, which is the 650,000 barrels per day capacity, plus a mini 80,000 tonnes per annum petrochemical plant.
What are we doing there? I can tell you today that we are seeking to have a 20 percent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.
That’s 650,000 barrels, going into a single crude distillation unit (CDU). When that comes on board, it will also wet the nation for us.”
Yakubu also noted that the state oil giant is collaborating with African Refinery in Port Harcourt, a co-location facility, the CNCEC Chinese group, which is interested in building two refineries in Nigeria, the Waltersmith modular plant and Azikel refineries on condensate production.
Yakubu stated that despite the global push for renewables, Nigeria has a local, domestic and regional market for hydrocarbons adding that Africa will continue to rely on fossil fuels at least in the next 20 years.
He said the country would not just fold its arms and do nothing with its hydrocarbons just because the International Energy Agency (IEA) has predicted a net-zero emissions scenario by 2050.
“Today when you are bringing products into Nigeria, they disappear to neighbouring countries.
There’s nowhere in countries around Nigeria that they sell fuel for less than N400 per litre. So, there’s a market.”
What to know about the Dangote Refinery
Dangote refinery is a 650,000 barrels per day (BPD) integrated refinery and petrochemical project under construction in the Lekki Free Zone in Lagos, Nigeria.
It is owned by the Dangote Group and is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility, upon completion.
The integrated refinery and petrochemical project which will meet 100% of Nigeria’s refined petroleum product requirement and even have a surplus for export when completed is expected to be completed in 2021 after some delays and will generate 9,500 direct and 25,000 indirect jobs.
It is designed to produce up to 50 million litres of petrol and 15 million litres of diesel a day, roughly 10.4 million tonnes of the product, 4.6 million tonnes of diesel, and 4 million tonnes of jet fuel per year, in addition to having a fertiliser plant, which will utilise the refinery by-products as raw materials.