Africa’s largest oil refinery is on the brink of producing significant volumes of gasoline, a landmark moment with the potential to transform the global market for the fuel.
Nigeria’s giant new Dangote facility near the commercial hub of Lagos is on the verge of producing large amounts of the road fuel, according to two people with knowledge of the matter. The plant will be able to process 650,000 barrels a day of oil when at full capacity, turning more than half of that into gasoline.
The ramp up is likely to be welcomed within the country, given that the state oil company — Nigeria’s main importer of fuel — said its ability to supply gasoline is being disrupted by debt and rising prices.
Dangote’s production will impact billions of dollars of trade in fuel markets regionally and beyond. Nigeria is a global demand sink for the fuel, receiving almost 250,000 barrels a day in shipments last year, mostly from Europe, according to data from analytics firm Vortexa Ltd.
Key to the plant’s gasoline output is a unit called a reformer, which produces blendstock for the road fuel. That’s started operating, with gasoline production expected to begin by the end of the week, one of the people said. Another said gasoline would be rolled out this week.
At full rates, the refinery is expected to be able to produce about 330,000 barrels a day of gasoline, according to Randy Hurburun, senior refinery analyst at consultancy Energy Aspects Ltd. That’s more than 1% of global demand for the road fuel, which is about 27 million barrels a day.
Still, those volumes are a long way off, with Energy Aspects forecasting about 90,000 barrels a day of production in the fourth quarter, increasing to almost 250,000 in the second half of next year. Key to raising output further is another unit called a residue fluid catalytic cracker.
The refinery has been gradually ramping up after years of delays. The plant’s owner, Aliko Dangote, said in July the plant was aiming to start gasoline production from August.
In response to questions about the various steps involved in ramping up gasoline output, a spokesman for Dangote said “we are on track”.
Source:norvanreports.com