Nigeria’s former President Muhammadu Buhari last month commissioned the Dangote Petroleum Refinery to transform the country into a net exporter of petroleum products. The refinery, located at the Lekki Free Zone near Lagos, has a capacity of 650,000 barrels per day.
With 1,100 kilometers of pipeline, the refinery’s infrastructure is the largest single-train refinery in the world, which will cost $19 billion to build after being delayed for almost a decade and can transport 3 billion standard cubic feet of gas daily.
Following the launch of the Dangote Refinery, aimed at making Nigeria become a petroleum exporter, experts have raised concerns over possible drawbacks on net zero goals and its environmental impact on residents.
The refinery is seen as the answer to persistent fuel shortages in Nigeria. There are high hopes for the refinery’s opening in the country’s energy sector. President Bola Tinubu announced the removal of fuel subsidies, citing a lack of budgetary allocation to sustain it for the 2023 second half. Payments for subsidies increased significantly from N351 billion in 2005 to N4.39 trillion in 2022, and N3.6 trillion was set aside to pay for fuel subsidies in the first half of 2023.
Being built by Aliko Dangote, the richest man in Africa, the mega-complex is among Nigeria’s biggest investments overall, with a deep seaport, a fertilizer plant, and a 435-megawatt power plant.
Nigeria imported petroleum products worth $23.3 billion last year and used about 33 million litres of petrol daily. The refinery is to have an excess of each of these products for export in addition to meeting 100% of Nigeria’s demand for all refined goods. With the ability to process various crudes, it is intended to process Nigerian crude.
Kelvin Emmanuel, co-founder and CEO of Dairy Hills Limited, a Nigerian food and beverages firm, said the refinery will re-invent Nigeria’s industrial supply chain for a generation, save the government $15 billion in FX yearly and debt sourcing to cover for deficit that was going into under-recovery for Premium Motor Spirit.
For more, read: https://gasoutlook.com/analysis/nigerias-dangote-refinery-launches-net-zero-in-jeopardy/