Dangote Plans Expansion to Rival World’s Biggest Refinery

Nigerian billionaire Aliko Dangote plans to more than double the capacity of his oil refinery, creating a facility that will be among the largest in the world.

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Or sign-in if you have an account.Aliko Dangote, president and chief executive officer of Dangote Group. Photo by Victor J. Blue /Photographer: Victor J. Blue/Blo(Bloomberg) — Nigerian billionaire Aliko Dangote plans to more than double the capacity of his oil refinery, creating a facility that will be among the largest in the world.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorDangote will expand the refinery’s capacity to 1.4 million barrels a day from 650,000 barrels a day, he said at a briefing in Lagos on Sunday. The expansion is a reflection of his confidence in the Nigerian economy as well as a response to rising regional demand, he said.A deal has been signed with the technology licensee for the plant to start the project, Dangote said. Once complete, the refinery will be as big as Reliance Industries Ltd.’s facility, which is controlled by fellow billionaire Mukesh Ambani.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againDangote plans to sell as much as 10% of the refinery in an initial public offering to help fund the expansion. He’s also in talks to secure a $5 billion loan from lenders including the African Export-Import Bank, the Financial Times reported, citing the tycoon. Dangote plans to initially raise the capacity of the refinery to 700,000 barrels a day by next year, before doubling that output over three years. The company will also boost its polypropylene production to 2.4 million tons from 900,000 tons, he said. The expansion plan comes as the plant struggles with accessing crude from the domestic market, while its residue fluidized catalytic cracking unit has had to be shut down at least three times for repairs since the refinery started operations in January 2024, causing supply disruptions. “The feedstock challenges previously and currently faced, particularly around securing a consistent crude supply from Nigeria, remain a critical operational risk to the refinery,” said Emmanuel Ifeanyi, an energy analyst at Andersen Nigeria. “Until the upstream sector is stabilized and transparent supply agreements are secured, scaling output could be less feasible.”The Dangote Refinery, built at a cost of $20 billion and already the world’s biggest single-train crude processor, has helped turn Nigeria from a net importer of refined products into a net exporter. It currently meets about 35% to 50% of the nation’s gasoline needs and has also exported petroleum products to markets as far as the US. The refinery will comply with a European vehicle-emission regulation known as Euro 6 Standard after the expansion, Dangote said, adding that revenue from the plant will increase to $55 billion. “What we are trying to do is replicate another line,” Dangote said. “This will give us better security, so that even if you’re going to shut down the refinery for 40 days, at least 50% of the refinery will still work.” Dangote is banking on an expansion of Nigeria’s crude output to guarantee feedstock for his expanded refinery, projecting that domestic production could easily grow to 2.4 million barrels per day by the time he finishes his plant. The output from the plant will go to African and other markets. Dangote said he has signed a deal with the Namibian government for the establishment of a tank farm that will supply refined products to Namibia, Botswana, Zimbabwe, Zambia and South Africa. In Africa, demand for petroleum products “is going up every single day,” Dangote said. “And that is why, these are the markets we want to serve.” Dangote, with assets valued at $30.5 billion, is Africa’s richest person, according to the Bloomberg Billionaires Index.Sign up here for the twice-weekly Next Africa newsletter, and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.—With assistance from Nduka Orjinmo.(Updates with analyst’s comment in seventh paragraph.) Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.