In a major move, the Nigerian National Petroleum Company Limited (NNPC) will start supplying six million barrels of crude oil to Dangote Refinery and Petrochemicals Limited in December of this year.

The vital supply is an essential step toward the complete operation of the $19.5 billion Dangote Refinery, the largest single-train refinery in the world.

On May 22, 2023, former President Muhammadu Buhari put the refinery into service. Five months later, it reached full technical completion.

According to several sources within the Nigeria Upstream Petroleum Regulatory Commission and Dangote Refinery, NNPC Limited has assigned crude oil to the refinery. A turning point was reached when contracts for the sale and purchase of crude oil supply were signed.

As per the terms of this allocation, the Petroleum Industry Act (PIA) enforces a domestic supply need to ensure a steady supply of crude oil to neighboring refineries.

Based on a willing buyer and willing seller model, PIA states that crude oil supply to the domestic market will occur.

With an integrated distillation plant, it is the biggest single-train refinery globally and the largest refinery in Africa for crude oil.

Three billion Standard Cubic Feet per day (Scf/d) of gas can be handled at the complex thanks to its extensive pipeline system, which spans 1,100 kilometres.

In addition, this refinery has a 435 MW power plant that can supply the Ibadan Electricity Distribution Company (IBEDC) with all of its electricity needs. Its capacity allows it to meet all of Nigeria’s needs for refined petroleum products, such as kerosene, diesel, petrol and jet fuel for aeroplanes.

Starting this week, the Refinery will receive 300,000 barrels of crude oil per day to support its operations, as the NNPC has already acquired a 20% equity part in the facility.

 

Most importantly, NNPC Limited would pay the internal petroleum product pricing mechanism from Dangote Refinery in the same way as any other consumer.

The president of the Dangote Group, Aliko Dangote, commended NNPC Limited for being a helpful partner that will provide essential support for the 650,000 barrels per day refinery’s startup.

He had previously verified that NNPC could provide crude oil to the facility.

The Dangote Refinery, located in the Lekki Free Trade Zone of Lagos, aims to increase Nigeria’s export market and fuel independence.