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Nigeria’s Dangote refinery, one of many largest on the earth, has moved nearer to manufacturing after receiving its first batch of crude oil from Shell’s oil buying and selling arm.
It marks a key second for the $20 billion refinery, financed by Africa’s richest man Aliko Dangote, after years of delays and price range overruns.
The supply by Shell’s buying and selling arm of 1 million barrels from one in every of Nigeria’s offshore fields represents the primary tranche of 6 million barrels of crude oil to be delivered to the power by a spread of suppliers, the Dangote Group mentioned in a press release on Friday.
The crude oil will allow the refinery to initially course of 350,000 barrels of crude oil per day into petroleum merchandise, together with gasoline, diesel and low-sulfur fuels.
Nigeria is Africa’s largest oil producer, however has needed to import fuels on account of a scarcity of refining capability. At full capability, the refinery will course of 650,000 barrels per day, which might remodel the nation right into a internet exporter of refined fuels.
Dangote, president and CEO of Dangote Group, described the deal as a “main milestone” and a “main achievement.”
“Our focus for the approaching months is to deliver the refinery to full capability. I sit up for the subsequent main milestone after we ship the primary batch of merchandise to the Nigerian market,” he mentioned.
The following 4 crude cargoes shall be delivered inside “two to 3 weeks” by the state oil firm, the Nigerian Nationwide Petroleum Company (NNPC), and ExxonMobil will ship the final of the primary six cargoes on an undisclosed date, the group mentioned.
The truth that the primary cargo got here from Shell and never NNPC will enhance hypothesis that Dangote, Nigeria’s largest industrialist, is but to succeed in an settlement with the state oil firm on the provision of crude oil.
NNPC owns a 20 p.c stake within the venture, which it acquired in 2021 for $2.76 billion, however is alleged to be in negotiations for a bigger stake. Dangote disputed the suggestion, telling the Monetary Occasions final month: “I do not assume NNPC wants to purchase extra shares. I feel they’re okay with what we have given them.”
The Dangote Group mentioned Shell’s crude oil can be used for an preliminary check of the plant’s capabilities earlier than processing of diesel, jet gasoline and liquefied petroleum gasoline and later premium motor gasoline begins.
Osagie Okunbor, Chairman of Shell Nigeria, welcomed the graduation of the refinery, including that Shell was “happy to make it potential”.
Dangote mentioned final month he anticipated the refinery to succeed in most capability by the top of subsequent 12 months, though the IMF has mentioned it doubts it is going to attain greater than a 3rd of that focus on by 2025.
The corporate didn’t reply to questions on when the primary batch of refined merchandise is predicted from the plant.