Dangote Refinery Imports US Crude Amid Supply Shortages
By Patience Ikpeme
The Dangote Petroleum Refinery is importing up to 12 million barrels of crude oil from the United States to address ongoing local supply challenges that are hindering its push towards full refining capacity.
The $20 billion refinery, which aims to reach its 650,000 barrels per day (bpd) capacity by June, has resorted to importing crude as supplies from the Nigerian National Petroleum Company Limited (NNPC) fall short of its requirements.
A statement from Dangote Refinery cited “low local crude supply from the Nigerian National Petroleum Company Limited” as a major obstacle to ramping up daily production.
Reports indicate that the 12 million barrels of crude have already left the US and are expected to arrive in Nigeria next month. According to the Africa Report, “About 12 million barrels of crude have departed the US and should arrive in Nigeria by February.”
While the refinery has reportedly ramped up production to around 500,000 bpd, achieving the targeted 650,000 bpd by June remains a challenge due to insufficient local crude supply. The NNPC is reportedly struggling to supply even 350,000 bpd of the 450,000 bpd earmarked for domestic consumption to the Dangote refinery. This shortfall necessitated the importation of crude to sustain current production levels and achieve the projected capacity.
Officials at the plant have acknowledged that the feedstock required daily cannot be solely provided by the NNPC. With the current production capacity, the refinery needs to explore alternative sources to meet its demands. This move comes despite President Tinubu’s July directive for the NNPC to sell crude oil to local refineries in Naira.
According to a crude oil production forecast signed by Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, the Dangote refinery will require 550,000 barrels of a blend of Nigerian crude oil daily, translating to 17.05 million barrels monthly and 99.55 million barrels between January and June 2025. The current supply from NNPC clearly falls short of this projected demand.
In anticipation of increased crude imports, the Dangote refinery is constructing eight additional storage tanks. This expansion will increase the refinery’s crude storage capacity by 41.67 percent, reaching 3.4 billion litres.
Dangote Industries Vice President in charge of oil and gas business, Devakumar Edwin, recently noted that importing crude necessitates higher stockpiles. The refinery had previously issued a term tender in May 2024 for two million barrels of West Texas Intermediate Midland crude monthly for 12 months, starting in July, totaling 24 million barrels.
The refinery’s reliance on imported crude underscores the challenges in securing sufficient local supplies, which officials say is “driving import dependence.” The new tanks will allow the refinery to stockpile imported crude as local supplies remain unreliable.
