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Petroleum Refining

Dangote's Lekki Refinery Finally Operational

After months of delay and one false start, the long-awaited crude unit began commercial operations on March 20

Released Thursday, April 04, 2024

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Hampered by a host of factors including, most recently, a shortage of crude oil feedstock, Dangote Industries Limited's Lekki, Nigeria refinery has commenced commercial operations of its crude unit. A recent alert from Industrial Info noted that the 650,000-barrel-per-day (BBL/d) unit was operating at 50% capacity. The company has not yet projected when it might reach 100% capacity.

Industrial Info has also learned of tentative plans for the 103,000-BBL/d naphtha hydrotreater and the 96,000-BBL/d reformer to begin commercial operations by early May. The refinery's 143,000-BBL/d mild hydrocracker is expected to start a trial run in the same time frame, with commercial operations on the calendar for the end of May. "While Dangote has already produced some straight-run distillate from the crude unit test runs, successful test runs of these downstream units will be essential for on-spec gasoline production," said Hillary Stevenson, IIR's senior director, Energy Market Intelligence.

Industrial Info will continue to monitor the refinery's progress and keep subscribers apprised of updates as they occur.

A Spotted History
Dangote planned the $15 billion refinery as a way to add value to Nigerian crude domestically instead of exporting crude oil at wholesale, then importing refined products such as diesel, gasoline and petrochemicals at a premium. It was originally scheduled to open in 2017.

Industrial Info is tracking 21 active projects tied to the Lekki refinery. Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database can click here for the list of project reports.

In addition to supply factors, other delays have come from fund shortages, unavailability of vendors and workforce, theft, supply-chain issues with replacing stolen equipment, and connectivity issues getting crude from field-based tank farms to the crude unit, Stevenson pointed out.

Its first trial run began on January 12. That lasted only 18 days, as the facility's domestic crude oil supply ran out on January 30. In December, 2023, Lekki had received two shipments of crude oil, including 1 million barrels from Nigerian National Petroleum Corporation Limited.

About the time of the January trial and shutdown, Dangote announced plans to import 2 million barrels of West Texas Intermediate (WTI) Midland crude oil from Trafigura Group, for late February delivery, which it did receive in early March. A second shipment of WTI Midland was slated for mid-March delivery, per Kpler data quoted in Argus Media.

Keeping crude flowing in--from somewhere--will be necessary, Stevenson said. "Consistent crude supply will be essential to the successful and continuous operation of the refinery. Crude procurement will need to balance value with price and dependability, which may advantage WTI barrels over local Nigerian supply in the short-term."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
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