Dangote Refinery Taps US Crude Market, Securing Fuel For Growth

• Dangote Refinery Diversifies Crude Sourcing

• US Oil Imports to Bolster Processing Capabilities

• Strategic Move Amidst Nigeria’s Production Challenges

Eko Hot Blog reports that the Dangote Refinery has unveiled plans to import a substantial 24 million barrels of US crude within the next year.

This strategic move aims to enhance the refinery’s processing capacities and meet its fuel production targets.

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According to reports, the $20 billion refinery has issued a tender for 2 million barrels per month of West Texas Intermediate Midland (WTI) crude.

Securing Reliable Crude Supply “Supply of Nigerian crude is insufficient or unavailable and sometimes unreliable,” stated Elitsa Georgieva, Executive Director at Citac.

Georgieva further added, “WTI, on the other hand, is available, with reliable supply and competitively priced.”

The decision to source cheaper US crude underscores the refinery’s potential influence in global crude and fuel trading.

Addressing Nigeria’s Production Challenges Nigeria has struggled to increase its crude production, consistently falling short of its OPEC+ quota for over a year.

Issues like crude theft, aging pipelines, low investment, and divestments from oil majors have contributed to this decline.

In response, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has proposed rules requiring producers to prioritize domestic refineries before exporting surplus crude.

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Flexibility and Optionality “Buying different feed stocks also provides flexibility and optionality for the refinery, so the tender makes economic sense for Dangote,” Georgieva explained.

The new rules could potentially enable the 650,000 barrel-a-day Dangote refinery to source more crude domestically, supplementing its US imports.

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