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Doubts cast over timetable of Africa’s largest refinery

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Reuters is reporting that an oil refinery being built in Nigeria by Africa’s richest man is unlikely to start production until 2022, two years later than the target date, sources with direct knowledge of the matter said.

The 650 000 bpd refinery near Lagos, set to be Africa’s biggest, is intended to turn the country from an importer of refined products into an exporter.

Billionaire Aliko Dangote, who built his fortune on cement, told Reuters last month he hoped to finish building the refinery in 2019 and to start production in early 2020. He said in July that he had raised over US$4.5 billion out of the US$12 – 14 billion he expects the project to cost.

However, the sources, who have been on the site many times, said they do not expect gasoline or diesel output before early 2022 and even then, many units at the refinery and accompanying petrochemical plant would not be complete. They added that such a large refinery would likely require five years to complete and the piling underpinning the plant – which would take some months to complete – had only started in the second half of last year. Furthermore, they claimed additional piling was needed to support plant units in a swampy area, adding to delays.

“I’ve never seen a refinery of that scale built in two years. It’s highly improbable due to the sequence of events that need to happen, it cannot be fast-tracked safely,” a source advising the Nigerian government said.

Analysts also anticipate delays owing to the scale of the project in an area with limited infrastructure.

“In our forecast, we are putting late 2021 at the earliest for some gasoline production but it may slip to 2022,” said Gary Still, Executive Director of CITAC, a specialist consulting company focused on African downstream energy.

Dangote Group Executive Director, Devakumar Edwin, who oversees the project, refuted suggestions however that the refinery is unlikely to start production until 2022: “95% of engineering has been completed, 90% of procurement has been completed. We started civil works in July last year and we have scheduled 2-1/2 years for mechanical completion.”

Fuel shortages are common in Nigeria, despite it being Africa’s biggest oil producer. The existing 445 000 bpd refining system operates well below capacity due to corruption and lack of investment, leaving the state oil firm to import the bulk of its gasoline and gasoil needs paid for with cargoes of crude oil.

Edwin told Reuters last month that more than half the plant’s output could be exported after covering domestic needs. The plant will be the world’s largest single-train refinery, meaning it will have only one crude distillation unit (CDU).

Read the article online at: https://www.hydrocarbonengineering.com/refining/13082018/doubts-cast-over-timetable-of-africas-largest-refinery/

 

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