Dangote Refinery Boosts Crude Imports Amid Naira-for-Crude Deal with NNPCL

The Dangote Refinery and Petrochemical Company has reportedly increased its crude oil imports from international suppliers as it continues to ramp up production. This comes as the refinery negotiates a new naira-for-crude agreement with the Nigerian National Petroleum Company Limited (NNPCL), with the current deal set to expire on March 31, 2025.

According to Bloomberg, the 650,000 barrels per day refinery has sourced crude from various international markets, including the United States, Angola, and Algeria. Since the start of March, the refinery has imported over three million barrels of American crude, in addition to shipments from Angola and Algeria.

Analysts from Energy Aspects Ltd. noted that crude deliveries to the Dangote refinery have increased to an average of 450,000 barrels per day over the past two weeks, compared to an estimated 380,000 barrels per day in January and February. Randy Hurburun, a senior refinery analyst at the consultancy, indicated that recent declines in crude stocks at the refinery suggest that production is on the rise.

Once fully operational, the Dangote Refinery is expected to process 650,000 barrels of crude oil per day, making it the largest refinery in Africa and surpassing any single refinery in Europe. The facility, which is set to reach full capacity by the first half of 2025, has already helped reduce Nigeria’s crude oil surplus and decreased the country’s reliance on fuel imports.

Despite ramping up imports, the Dangote refinery remains heavily dependent on Nigerian crude. According to Bloomberg’s tanker-tracking data, the refinery imported more than 10 million barrels of local crude last month alone. The NNPCL has supplied 48 million barrels of crude since the initial agreement with Dangote in October.

Industry experts suggest that the price competitiveness of different crude grades will continue to influence the refinery’s crude sourcing strategy. Ronan Hodgson, an analyst at FGE, explained that the West Texas Intermediate (WTI) grade will remain attractive to the refinery because of its light-sweet nature and competitive pricing compared to local West African grades. The refinery may also explore crude from other regions, such as Libya, the North Sea, and the Mediterranean, depending on market conditions and terms.

In conclusion, the Dangote Refinery’s gradual shift toward international crude supplies reflects both its increasing production capacity and the ongoing strategic negotiations surrounding its crude sourcing arrangements with the NNPCL.