Who is Afraid of Aliko Dangote?
By Eric Elezuo  He has remained Africas richest man for as long as one can remember, and at many quarters, his business acumen has been applauded. Dangote Refinery   The Dangote Petroleum Refinery is located in the South-East of the Lekki Free Trade Zone (FTZ) in Ibeju-Lekki, Lagos, covering a land area of approximately 2,635 hectares (six times the size of Victoria Island). The following projects are within the Lekki FTZ:   Largest Single Train Petroleum Refinery in the World  650,000 barrels-per-day (more than enough to meet Nigerias petrol needs and for export)   Two of the Worlds Largest Fertilizer Trains  3 Million Tonnes per Annum (It is bigger than the 1.4 million tonnes per annum Indorama Fertilizer Limited).  Largest Sub-Sea Pipeline Infrastructure in any country in the World  1,100 kilometres to handle 3 Billion Standard Cubic Foot of gas per day.  The 400 MW Power Plant in the Refinery alone will be able to meet the total power requirement of Ibadan DisCo of 860,316 MWh covering five States including Oyo, Ogun, Osun, Kwara and Ekiti.  Dangote Petroleum Refinery can meet 100% of the Nigerian requirement of all refined products (Gasoline, 57 million litres per day; Diesel, 27 litres per day; Kerosene, 11 million litres per day and Aviation Jet, 9 million litres per day) and also have surplus of each of these products for export.  $12 Billion Investment estimated by Dangote.  Creates market for $11 billion per annum of Nigerian Crude.  Designed for 100% Nigerian Crude with flexibility to process other crudes.  Strategically located marine infrastructure for Crude receipts & product trade. Concrete Requirement Quantity, m3  Concrete for Piling (105,000 piles including expansion) 460,000  Residual Catalytic Cracking sub-structure 400,000  Residual Catalytic Cracking sub-structure 100,000  Pavement in Plant Areas 150,000  Buildings (Plant & Non Plant) 90,000  Infra Works (Roads, Drains, etc) 610,00   At thickness of 9 inches, 16 metres wide, the concrete required for the Refinery project is enough to pave the entire Federal Roads in Lagos (720KM). Over Dimensional Cargo (ODC) Dangote has brought in several over dimensional cargoes due the size of the refinery project. Two weeks ago, the company took delivery of Crude Distillation Column, a piece of equipment which has the length of a soccer field and the weight of 320 large elephants. Building Local Capacity   Dangote has employed over 10,000 Nigerian personnel on site. Employment by the various contractors and subcontractors at the site is 7,500. The current ratio of Nigerians to Expatriates is 93% Nigerians to 7% Expats.  A total of 900 Nigerian Engineers to be trained in design, engineering and design of the refinery. There are currently other Engineers currently under-going training.  The company recently completed the training of 200 artisans selected from the host communities in the areas of Masonry, Carpentry, AC Electricians, Plumbing, Welders, Iron-benders and Auto Mechanics. This was achieved in collaboration with the Nigerian Directorate of Employment and Nigerian Content Development and Monitoring Board. (This is one of Dangote Refinerys Corporate Social Responsibility programmes within the host communities). Benefits of Refinery in Nigeria   Technology.  Employment.  Generation of power.  Professional development.  Production of petrochemicals.  Increased demand for domestic crude.  Unhindered availability of the product.  Development of local area and ancillary industries   Availability of high quality products (Euro V Grade).  Annual Foreign Exchange earnings from exports of USD 5.5 Billion.  Annual Foreign Exchange Saving from import substitution of USD 7.5 Billion. Site Accommodation & Other Infrastructure   63,000  Peak manpower is estimated to complete the scope.  Site office, Warehouse, Laydown Areas completed   Accommodation for 16,000 workmen has been made ready.  Accommodation for 20,000 work men and 2,000 Managers is ready.  Local accommodation is available in plenty around Lekki Free Trade Zone.  Lots of large housing complexes have come up in last 4 years considering Project demand. Dangote Fertilizer Plant  Dangote Industries Limited is constructing the largest fertiliser Plant in West Africa.  Dangote Fertilizer Project is the largest Granulated Urea Fertilizer complex coming up in the entire fertilizer industry history in the world, with an investment of USD 2.0 Billion capacity of 3 Mil TPA.  The Dangote Fertilizer complex consists of Ammonia and Urea plants With associated facilities and infrastructure to produce 3 MMTPA Urea, the complex envisages:   2 x 2,200 MTPD Ammonia Plants based on Halder Topsoe technology   2 x 4,000 MTPD Melt Urea Plants based on Snamprogetti technology   2 x 4,000 MTPD Urea Granulation Plants based on Uhde Technology   A Captive Power plant comprising of 3 Steam Turbine Generators of 40 MW capacity each, making a Total of 120 MW  East-West Offshore Gas Gathering System (EWOGGS)   For decades, Nigeria has been accused of polluting the atmosphere by flaring gas while the country itself has been facing shortage of gas.  EWOGGS pipeline project will unlock significant gas supply for industry and will considerably reduce flaring   Power Plants, Fertilizer, Refinery and Petrochemical Projects and others will benefit from this gas supply   Pipeline Dimensions, 2 x 38 x 550 kilometre   Pipe Capacity, 2 x 1,512 Million Standard Cubic Feet/day Benefits of EWOGGS   Gas will be readily available for commercial use. This nullifies the need for future gas import  Leads to diversification of Nigerias economy.  Ensures increased government revenue (and meet demand for domestic petrochemical products)   Increase in FX from exports.  Creation of direct and indirect jobs  NNPC follows in the footsteps of Saudi Aramco  NNPC is following in the footsteps of successful National Oil Companies (NOCs) in acquiring stakes in refineries across the world. Saudi Aramco has been buying up stakes in refineries outside its shores as part of its plan to boost its refining capacity to up to 10 million b/d in the long term from around 5 million now. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d. In 2019, Saudi Aramco started talks to acquire a 20% stake in Mukesh Ambani groups oil refining unit (Reliance). Reliance has a refining capacity of 1.2 million barrels per day. The deal was delayed due to the fallout of the pandemic but talks have recently restarted. In 2017, Rosneft (an oil company controlled by the Russian Government), acquired a 49% stake in Indias Essar refinery. The Essar refinery has a capacity of 400 thousand barrels per day. One might wonder why such leading NOCs are embarking on acquisition of refining capacity across the world. Well the answer is simple  the structure of the oil industry shifted in 2014, from supply tightness to supply surplus. This was due to the boom in the production of shale oil in the US. The industry is facing further structural shifts as the world embarks on an energy transition away from oil in order to reduce carbon emissions. With this demand shift, it is increasingly vital for oil producers to have a guaranteed buyer for their crude and this is where the refineries come in. In periods of stress, oil producers can be left with stranded cargoes looking for buyers as happened in 2020. With a refining capacity of 10m barrels across the world, Saudi Aramco is assured of a buyer for their crude oil production. With an acquisition of a 20% stake in the Dangote refinery, NNPC is embarking on a similar journey. Secondly, when the PIB eventually gets passed, NNPC will transition from a parastatal to a private company owned by Nigerians. The new NNPC will go to the capital market to source for capital to fund its investments and will have to deliver adequate returns to sustain its operations. It is therefore forward thinking from the NNPC management to get in early and acquire a stake in a very attractive investment opportunity like the Dangote refinery  Like this: Like Loading...