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$20 Billion Dangote Refinery Strikes Deal to Import Crude Oil from United States

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$20 Billion Dangote Refinery Strikes Deal to Import Crude Oil from United States

In a groundbreaking move, the $20 billion Dangote Refinery has finalized plans to import crude oil from the United States, marking a significant shift in Nigeria’s energy dynamics. The refinery, with its ambitious 650,000 barrel-a-day capacity, is set to receive two million barrels of WTI Midland from Trafigura Group, with delivery scheduled by the end of February 2024.

This marks the first time the Dangote Refinery, a key player in Nigeria’s petroleum industry, will be sourcing non-Nigerian crude. The decision reflects the changing global market, influenced by the substantial growth in U.S. oil supply over the past decade. The refinery’s move to diversify its crude sources is anticipated to have broader implications for Nigeria, which heavily depends on petroleum exports for its economy.

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The Dangote Refinery, having commenced operations earlier this month, initially targeted processing 350,000 barrels per day and aims to gradually increase production toward its full 650,000 barrel-a-day capacity. While the refinery primarily relies on domestic crude through an agreement with the state-owned NNPCL, the recent deal with Trafigura signifies a strategic move towards incorporating international crude sources.

Recent shipments of Nigeria’s Agbami crude, facilitated by Shell, marked the refinery’s initial foray into domestic crude processing. The completion of the six million barrels consignment, initiated by the Nigeria National Petroleum Corporation Limited (NNPCL), is seen as a crucial milestone by Mr. Akin Omole, Managing Director of Dangote Ports Operations. He emphasized that this delivery would kick-start the production of diesel, aviation fuel, Liquefied Petroleum Gas (LPG), and eventually Premium Motor Spirit (PMS).

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Designed to process 100% Nigerian crude with the flexibility to handle other crudes, including U.S. Light tight oil, the Dangote Petroleum Refinery is poised to transform Nigeria’s oil landscape. The refinery, with surplus production for export, is positioned to address not only Nigeria’s fuel supply challenges but also those faced by West African countries.

This strategic move by Dangote Refinery underscores its adaptability and forward-thinking approach in an ever-evolving global energy landscape.

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