Lagos, Nigeria (CNN) Nigeria on Monday commissioned the Dangote oil refinery – said to be “pioneering” in ending the country’s fuel imports.
Outgoing President Muhammadu Buhari commissioned the 650,000 bpd refinery in the Lekki Free Trade Zone of the Lagos commercial hub at an event attended by some West African heads of state.
The Dangote Group’s giant refinery, owned by Africa’s richest man Aliko Dangote, is valued at $20 billion and aims to produce up to 53 million liters of gasoline a day, as well as 4 million liters of diesel and 2 million liters of jet fuel a day .
At the event, Dangote described the refinery as “the world’s largest single train refinery”.
The refinery is expected to solve some of Nigeria’s petroleum problems. Although Nigeria is an oil producing country and one of Africa’s largest oil producers, it lacks the capacity to refine its oil.
A large part of these products, which exist in the West African country, are imported from other countries such as India, Belgium, the United Arab Emirates and the Netherlands.
Between 2015 and 2019, the cost of importing refined petroleum products exceeded exports by $58.5 billion, according to OPEC, a group of major oil producers.
The lack of refining capacity in Nigeria brings many challenges such as: B. the annual spending on imports in the billions and the risk of a disruption in domestic fuel supplies.
The Dangote Refinery is important as it aims to solve these problems by doubling the country’s refining capacity, increasing domestic demand for fuel and generating foreign exchange for the country through exports.
“There will be a steady supply of high-quality fuels for our transportation sector, and the refinery will also provide our industry with vital raw materials for a wide range of manufacturing processes,” said Dangote, who partially funded the construction of the refinery.
Around 50% of the funds used to build the refinery came from Dangote’s equity investment, while the other half came from debt financing from banks such as Access and Zenith.
“We built a refinery with the capacity to process 650,000 barrels per day in a single train — the largest in the world… We chose a facility that featured state-of-the-art technology and a size of a capacity that will play a crucial role in Africa and in the world market,” added Dangote.
The refinery is located within the Lekki Free Zone, a 16,500 hectare free trade zone whose master plan also includes a proposed airport, start-up community, commercial and residential areas.
Nigerian Central Bank governor Godwin Emefiele said the refinery was “more than capable, given its processing capacity, of supplying all of Nigeria’s domestic fuel consumption.”
Emefiele further explained, “Nigeria can be self-sufficient in all the products we consume while exporting our excess production to the rest of the world.”
Ghana’s President Nana Akufo-Ado, who was also present at the event, called the Dangote refinery a “spectacular project” that “makes West Africa better and stronger”.
The size of the refinery is seven times the size of Victoria Island in Lagos and covers an area of over 2000 hectares.