Dangote Places Order For Refinery Equipment As FG Grants Licence

Aliko Dangote
The quest by Africa’s richest man , Aliko Dangote to make
an intervention in Nigeria’s long standing fuel supply
hiccups is being pursued vigorously with advance orders
believed to have been made for equipment that will be used
to build his proposed $8 billion refinery and petrochemical
plant in Lekki, Lagos.
It was learnt yesterday that the orders for these equipment
were made ahead of government granting a Licence-To-
Establish (LTE) a refinery which Dangote received only a few
days ago.
The equipment ordered include ‘Long Lead Items’ and a
power plant, which ordinarily would take  between 18 and 21
months from time of order to time of delivery.
It is anticipated that these advance orders may cut short
the take-off time of the project.
The Dangote Refinery and Petrochemical Plant is scheduled
to become operational in the third quarter of 2017 and would
have the capacity to process 400,000 barrels of petroleum
per day.
Industry watchers say the establishment of the refinery
would bring significant relief to the fuel supply situation in
the country, save scarce foreign exchange, create jobs and
serve as a platform for skills acquisition for the local
workforce. It should also add to the purse of Aliko Dangote
who is already Africa’s richest man.
Nigeria currently consumes 40million litres per day of
premium Motor Spirit (PMS) otherwise known as petrol, the
bulk of which is imported from Europe because the
country’s four refineries are hardly functional much of the
time.
The company is said to have before now concluded the re-
settlement of communities, land clearing and site surveys
for the project. Real construction work is expected to now
start in earnest.
The licence was issued to the company by the Department
of Petroleum Resources  (DPR ) and basic engineering
work is expected to be completed in January next year.
The next step would be detailed engineering   work, which
would involve structural, mechanical, civil and electrical
aspects and procurement.
Commenting on the development, a stakeholder in the
downstream sector of the oil and gas industry who does
not want his name mentioned, said it portends well.
‘’ It is a good development because I have always said that
the private sector must be allowed to do the business of
petroleum refining. However, some questions must be
asked.What price is the company going to sell the products
at? What price is the company going to buy the crude oil
from government at?”
He added that if  the company is going operate at the Export
Processing Zone (EPZ) ,it would mean that it would sell the
products at the going international price, which he said
would end up higher than current pump price.
Muda Lawal, director-general of the Lagos Chamber of
Commerce and Industry, said it is a welcome development
that a major private  investor is taking  part in the
downstream sector, especially in refinery. “Over the years
the government did not have the capacity to run refineries,
hence the huge sums spent on the importation of refined
products that have been putting pressure on the nation’s
foreign exchange”.
He said the Dangote Refinery deserves to be supported,
even as he cautioned that a major reform needs to take
place in the downstream sector before such investment can
be sustained.
“The downstream must be deregulated for such investment
to be sustainable”, he said.
UOP, the oldest refining technology licensor in the world,
which supplies refinery licences across the globe is the
architect of the technology being put in place, while
Engineering India Limited (EIL) is doing the detail
engineering work on the refinery.
The Indian company was awarded a $139 million contract
by the Dangote Group.