Nigeria leads Africa’s quest to wean itself from petroleum products’ importation

Africa is finally taking steps to wean itself from massive petroleum products importation going by over 1 million barrels per day (bpd) of new refining projects scheduled to be completed in the next few years.

Dangote refinery in Nigeria is leading the pack with its 650,000 b/d Dangote refinery in Nigeria and it is projected to save Nigeria $12 billion annual import substitution, create 4,000 direct jobs and crash prices of petroleum products.

“We would have the capacity to store four billion litres of products and can load 2,680 trucks per day. This is the single largest refinery in the world. The petrochemical that we have is 13 times bigger than the Eleme Petrochemical built by the government”, said Babajide Soyode, the Technical Consultant to Alhaji Aliko Dangote.

In addition to the Dangote refinery, there are other modular small scale refinery project in works with combined capacity of about 100,000 bpd.

Other African countries have also announced ambitious refining projects. Ghana recently said it will build a 150,000 b/d refinery in Takoradi along with potential upgrades at the country’s existing Tema Oil Refinery.

Angola has also set its sights on building a 200,000 b/d refinery in Lobito by 2022 along with a smaller plant in Cabinda. State-owned Sonangol has recently taken some steps to reform its imports by broadening its supplier base and last week it said it plans to build a fluid catalytic cracker at its Luanda refinery, to reduce its gasoline imports.

Africa does not produce enough refined products to meet demand, resulting in imports from the US, Europe, the Middle East or the Far East. West and East Africa particularly pulled in growing volumes of gasoil and gasoline last year, helping to support price differentials and refiners’ margins globally.

Asia, in particular China and India, and the Middle East have had large refinery capacity additions in recent years. These are likely to continue over the next few years, even if in some other regions, such as Europe, capacity is falling due to low margins.

Smaller modernization and construction projects are also likely to go ahead in Senegal, Cameroon, Angola, Nigeria, Ivory Coast and Gabon in the near future, which will be key as the continent continues to experience some of the largest demand gains of refined products globally in recent years.

FRANK UZUEGBUNAM