Lagos, Nigeria's commercial nerve centre, will today play host to many oil and gas industry heavyweights who would be arriving the city from different parts of the world to witness the inauguration of the world's largest single-train refinery, a 650,000 barrels per day facility built by Africa's richest man, Alhaji Aliko Dangote.
THISDAY learnt yesterday that the refinery, which will be inaugurated by President Muhammadu Buhari and seven African presidents, would alter the international energy landscape and try to sanitise the country's petroleum sector by ending the smuggling of imported petrol outside the country.
Presently, 80 per cent of fuel in Africa, from Cape Town to Dakar and other parts of the continent, are imported. This, the refinery is expected to address.
Expected at the historic event, apart from international dignitaries, are presidents of Togo, Gnassingbé Eyadéma; Ghana, Nana Akufo-Addo; Senegal, Macky Sall; Niger Republic, Mohamed Bazoum; and Chad, Mahamat Déby.
President Paul Kagame of Rwanda, who would not be physically present, would present his goodwill message virtually.
At the time of filing this report, all the 36 state governors and most of the governors-elect, ministers, senators, and captains of industry in Nigeria and others from outside the country had indicated their readiness to grace the ceremony.
Nigeria's president-elect, Bola Tinubu, whose administration as the governor of Lagos, in 2002, floated the Free Trade Zone in Ibeju-Lekki, where the refinery is located, is also expected at the event.
The Governor of Osun State, Senator Ademola Adeleke, described the facility as, "A continental game changer with huge capacity to positively transform Nigeria and African economy."
President of Afreximbank, Professor Benedict Oramah, disclosed that the bank was the largest financer of the over $19 billion Dangote Refinery, the world's biggest petroleum refining facility that would come into operation this month.
Renowned economist and Chief Executive Officer, Financial Derivatives Company Limited, Bismarck Rewane, noted that the Dangote refinery could help strengthen Nigeria's macroeconomic stability, when fully operational.
A source told THISDAY by telephone that many top guests from Nigeria, including ministers, governors, senators, as well as heads of relevant government agencies and establishments were being expected.
According to the source, global commodity traders in the oil and gas industry, including Singapore-based Trafigura, one of the world's largest independent traders of oil and petroleum products; and Vitol, a Swiss-based Dutch multinational energy and commodity trading company, would all be in attendance.
"A lot of people are coming: governors, senators. This one is like the highpoint of inauguration; it's an inauguration week. All these oil traders -Trafigura, Vitol and others will all be there," the source said.
Some of the big names expected to attend the inauguration from Nigeria include Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari; Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe; and Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Ahmed Farouk.
Others are Permanent Secretary, Ministry of Petroleum Resources, Mr. Gabriel Aduda; Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele; Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed; Minister of Industry, Trade and Investment, Mr. Adeniyi Adebayo; and Femi Otedola, among others.
Representatives of downstream associations, including Major Oil Marketers Association of Nigeria (MOMAN); Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN); and Independent Petroleum Marketers Association of Nigeria (IPMAN) were also invited, THISDAY learnt.
A top official of the refinery told THISDAY, "You can imagine, those that used to supply us with finished products will stop. All these traders that buy from them will also stop buying, then, they will look elsewhere where they will go and dump their crude and where they will go to sell the refined products.
"And this door has closed for them because it has been a lucrative business for them for more than 30 years. So Nigerians are supposed to be happy.
"This is the end of smuggling. The issue of people carrying products across the borders is no more. Nigeria will now be supplying crude to an authentic refinery. So whichever way you look at it, whether it's snuggling or oil theft, it's going to bring sanity to the sector.
"People carry all this fuel and cross to the border because they want to make some dollars, and they will tell you that local consumption is high, meanwhile the majority is crossing the borders - either Cameroon, Niger or Benin.
"You know, it's not easy to bring sanity in any environment and any attempt to bring it, people will try to frustrate you. So, it's a pity for anybody resisting it, the change has come. Whether they like it or not, they will fall into shape. People cannot continue to suffer for this length of time. One day, there will be light at the end of the tunnel."
According to the project's fact sheet released by Dangote Group, the refinery located in Ibeju-Lekki, Lagos, covers a land area of approximately 2,635 hectares, which is seven times the size of Victoria Island.
The refinery is the biggest refinery in Africa and also the biggest single-train refinery in the world. A single-train refinery uses an integrated distillation unit or one Crude Distillation Unit (CDU) to refine crude oil into various petroleum products, as against the use of multiple distillation units by big refineries.
Due to the large capacity of the refinery, its pipeline infrastructure is the largest anywhere in the world, with 1,100 kilometres to handle three billion Standard Cubic Feet per day (Scf/d) of gas.
The refinery has a 435MW-capacity power plant that is able to meet the total power requirement of Ibadan Electricity Distribution Company (IBEDC).
The refinery has the capacity to meet 100 per cent of the Nigerian requirement of all refined petroleum products, such as petrol - 53 million litres per day; diesel - 34 million litres per day; kerosene - 10 million litres per day; and Aviation Jet, two million litres per day. There is also surplus of each of these products for export.
Designed for 100 per cent Nigerian crude with flexibility to process other crudes, the refinery has a self-sufficient marine facility with ability for freight optimisation and also has largest single order of 5 SPMs anywhere in the world.
The refining plant has been described widely as a legacy project that will see Nigeria netting $21 billion per annum.
The company said diesel and gasoline products from the refinery would conform to Euro V specifications.
The fact sheet added, "The refinery design complies with World Bank, US EPA, European emission norms and Department of Petroleum Resources (DPR) emission/effluent norms. State-of-the-art technology. Designed to process large variety of crudes, including many of the African crudes, some of the Middle Eastern crudes and the US Light Tight Oil."
It also stated, "65 Million Cubic Metres of sand dredged costing approximately Euros 300 million, using the world's largest, the second largest and the tenth largest dredgers to elevate the height by 1.5 metres, to insure against any potential impact of increase in mean sea level due to global warming. Bought over 1,209 units of various equipment to enhance the local capacity for site works.
"Bought 332 cranes to build up equipment installation capacity. Built the world's largest granite quarry to supply coarse aggregate, stone column material, stone base, stone dust and material for break water. (10 million tonnes per year production capacity).
"Developed a port and constructed two quays with a load bearing capacity of 25 tonnes/ sq metres to bring Over Dimensional Cargoes close to the site directly. The company also constructed two more quays in the port with a capacity to handle up to Panamax vessels to export the fertiliser and the petrochemicals and two quays to handle liquid cargoes. The port will, thus, have six quays, including a Roll-on/Roll-off quay."
Dangote Refinery a significant achievement for Africa, Adeleke declares
Governor of Osun State, Senator Ademola Adeleke, described the refinery as, "A continental game changer with huge capacity to positively transform Nigeria and African economy."
In a congratulatory message to President of Dangote Group, Alhaji Aliko Dangote, Adeleke noted that the completion of the refinery within record time signalled a new era of energy sufficiency for Nigeria and Africa.
The governor stated, "The new facility will service Africa and boost local and continental Gross Domestic Product."
Praising Dangote's ingenuity in the conception and implementation of the project, Adeleke testified that the successful completion was an affirmation of the business acumen and integrity of Dangote, a personality, he said, had become "a major propeller of the African Continental Free Trade Area (AFCTA).
"By his extensive investment across Africa and by his latest accomplishment with this biggest refinery on the continent, Alhaji Dangote is unarguably the patron of AfCTA, a facilitator of intra and inter African trade, an enabler of Africans trading with Africans and mobiliser of African capital serving Africa."
Adeleke described Dangote as a blessing to the black world, saying the refinery project remains a landmark initiative, a gift from Africa to world business and a declaration of Nigeria's emergence as a global player in the old and new business order.
Oramah: Afreximbank Proud as Largest Financier of Dangote Refinery
President of Afreximbank, Professor Benedict Oramah, disclosed that the bank was the largest financer of the over $19 billion Dangote Refinery, the world biggest petroleum refining facility, which would come into operation this month.
Oramah made the disclosure last weekend in Accra, Ghana, during the Afreximbank's 2023 pre-annual meeting press conference for the bank's 30th anniversary celebration. The event would be hosted in June in the Ghanaian capital, with the theme, "Delivering the Vision, Delivering Prosperity for Africans."
The Afreximbank president said, "We are proud to have contributed very strongly to the Dangote Refinery that will be opening on the May 22nd. The Dangote Refinery is one of the largest heavy industries ever done on the continent because it is about $19 billion.
"We are the largest financers of that project. The issue of value addition is a priority for us. Most of the things we do are not just creating the goods. We are also helping to develop export-trading companies to create access to market. We are also making sure that whatever we do support the growth of regional supply trade."
Oramah said apart from financing industries, Afreximbank also ensured financial stability in Africa by enabling African operators in the financial system to acquire many of the international banks in the continent.
He stated, "Under a strategy that Afreximbank is implementing, we are making sure that these banks are acquired by African financial institutions because that is the only way to bring stability to our financial system.
"A situation where our banks are dominated by foreign owned institutions is not all that healthy. While we welcome foreign investors, Africans should own the majority of African banks if you want to avoid instability."
Oramah also spoke on energy financing and the need to safeguard the environment and called on the wealthy champions of climate and environment issues to take it easy for Africa and allow it to utilise its resources for its own prosperity without let or hindrance.
He said, "The issue of climate is important. But Africa and Africans are more of victims than contributors to the problem. We do not generate the carbon that is causing all these things. Young people going to school in our villages are studying with kerosene lamps. Will you tell a child to switch off the kerosene lamp in order to be energy efficient?
"We think that the emphasis for us will be on adaptation. That is where the risks are for us. We must put pressure on those who contribute most of the carbon to reduce their carbon emission. If you look at the per capita emissions and compare it what you will call the targets that we have set, you will find that Africa still has headroom to emit more because we need to have the energy to run our industries. But others have to reduce theirs. But I know that it is a long talk and the weak can only talk."
The president of Afreximbank explained that the choice of the theme for the bank's 30th anniversary was informed by the critical role Afreximbank had been playing over the past three decades in the promotion of economic integration in Africa through support for intra-African trade and investments.
He explained that the choice of Ghana as the host of the 30th anniversary was not a difficult one because Ghana, on account of the pioneering work of its first president, Dr. Kwame Nkrumah, was the birthplace of Pan Africanism and it had shown unwavering commitment to African ideals, which Afreximbank subscribe to fully.
Oramah said, "Afreximbank put itself forward as a bank for all Africans wherever they may be.
"The 30th anniversary celebration will be the first gathering of the global Africa because it will be the first annual meeting of the Afreximbank that will welcome our brothers and sisters from the Caribbean's and diaspora as participating states of Afreximbank following the decision of the Caribbean community last year to join Afreximbank and use Afreximbank as a vehicle for integration of trade, investments and economic relations between Africa and the Caribbean.
"It will be a meeting of global Africans from all walks of life with stakeholders traversing Caribbean, Europe, North America and Asia.
"In addition to our shareholders who will be here, we expect 4,000 guests here during the week."
Rewane: Dangote Refinery Will Strengthen Nigeria's Macro-economic Stability
Bismarck Rewane argued that the Dangote refinery could help strengthen Nigeria's macroeconomic stability, when fully operational.
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Speaking on Arise Television, THISDAY's broadcast arm at the weekend, Rewane, however, suggested that the facility would not necessarily eradicate all the challenges in Nigeria's oil sector or even in the Nigerian economy.
Rewane said the commencement of the Dangote refinery could further debottleneck the oil sector and increase human, labour, and capital stock productivity as well as restore investors' confidence, to some extent, in the ailing Nigerian economy.
He stated that Nigeria needed to use its oil revenues wisely, to create a better future, especially, as the world was moving toward renewable energy technologies. But Rewane noted that despite the reservations, the Dangote refinery remained a major milestone on the path towards achieving macro-economic stability.
Rewane said, "The first thing is to clear the myths that Dangote refinery is here and, therefore, it will solve Nigeria's numerous problems. That's not true. But the refinery is a milestone on the path to achieving macro-economic stability, but it is not the be-all.
"In other words, it is a necessary condition, but not a sufficient condition to cure all of it. Number two, it's a $19 billion project and you know that South Africa's refining capacity has been mostly shut in."
Although, the refinery won't solve Nigeria's foreign currency issues, Rewane maintained that Nigeria could now solve logistics issues surrounding products' supply as well as ensure availability. But its impact on foreign exchange will be minimal, he said.
The renowned economist said down the road, the refinery could also lead to GDP growth due to the debottlenecking of the sector.
He stated, "People spend half of their time trying to queue up for petrol and queue up for everything because of the bottlenecks in this sector. If one project can de-bottleneck a particular sector, we would have increased the probability of having higher productivity - both human, labour, and capital stock productivity significantly.
"Therefore, we could see, maybe down the road, a spike in GDP growth, maybe from two or three per cent averagely to around four or five per cent because of the de-bottlenecking of this sector, which is critical to Nigeria's economic fortunes."
He stated that it would take a long time for the oil and gas industry to become extinct, especially in an oil-producing country like Nigeria, which is reliant on revenues from the sector.
According to him, oil for now is the golden goose for Nigeria's growth, and Nigeria needs to tap and utilise the natural resource now that it is still needed in most parts of the world.
Rewane said, "If we use it wisely, then, there is a future, but if it is used stupidly, then that will be a missed opportunity and Nigeria quite frankly cannot afford missed opportunities at this time."
Noting that the refinery would send the right signal to foreign investors, when it commences operation, Rewane said the price of fuel will not markedly change by with development.
On the NNPC refineries currently undergoing rehabilitation, Rewane noted that if they were not viable in the end, they will die a natural death, while for smaller Nigerian modular refineries, the economies of scale may be a disadvantage.
Rewane stated that there would be huge productivity gains if the crude and products pipelines worked.
He called for an overhaul of the justice system to ensure that faith in the judiciary was restored.
Rewane said there had to be massive investment in the pipelines to reduce the wear and tear on the roads, explaining that it can cost another $15 billion to do so.
