The Organisation of Petroleum Exporting Countries has said the refinery being built by Dangote Group is expected to reduce the need for fuel imports in West Africa.
OPEC, in the current edition of its World Oil Outlook, noted that the refinery would refine as much as 650,000 barrels of crude oil per day.
A statement from Dangote Group quoted OPEC as saying, “Last year’s World Oil Outlook hinted that, in Africa, ‘new projects could improve the situation somewhat toward the end of the period.’ This year, increasing confidence that the Dangote project in Nigeria will go ahead is indeed changing the picture.
“Allowing for some uncertainty in the project’s start-up timetable, incremental potential in Africa is expected to continue to lag incremental demand-based requirements through 2020, after which the potential is for a balance or excess requirements.
“A deficit of around 0.2 million barrels per day in 2019 to 2020 is estimated to swing to an excess of around 0.3 million bpd by 2022 to 2023. It must be borne in mind that this regional outlook is unusual in that it hinges largely on a single project.”
According to OPEC, in Africa, there are 50 refining projects, which, if all built, would add nearly five million bpd of new refining capacity to the continent.
It said, “This year, the outlook represents a significant reversal from recent history. For the first time in many years, projected firm additions at 1.1 million bpd exceed regional demand growth for 2018 to 2023 at 0.7 million bpd.
“This change relates primarily to one project in Nigeria now under construction. Recognising that this one major project is in West Africa, the prospects for North and East/South Africa continue to be for further increases in regional net product imports.
“Since the project is in West Africa, its implementation does not necessarily alter the situations in North and East/South Africa. What should happen, especially in West Africa, is a reduction in the need and opportunity for product imports.”
The Group Executive Director, Strategy, Portfolio Development and Capital Projects, Dangote Industries Limited, Mr Devakumar Edwin, said OPEC was correct in its estimation, adding that all hands were on deck to deliver the refinery on time.
According to him, Dangote Group’s ongoing refining and petrochemicals project can meet 100 per cent of the domestic demand for petroleum products (petrol, diesel, kerosene and aviation fuel), leaving the surplus for export in line with OPEC’s expectation.
He said that the high volume of petrol output from the Dangote refinery would transform Nigeria from a petrol import-dependent country to an exporter of refined petroleum products.