Dangote Refinery Now Ready To Begin Operation, As NNPC Promises To Supply Crude Oil
- The NNPC has signed a new deal to supply crude oil to Africa’s biggest refinery
- From December, Sources say Dangote Refinery will receive about 200,00 barrels of crude oil per day
- It was however noted that the agreement would only last for a year after which supply would be on agreement
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Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market
By December, Dangote Refinery will receive crude oil from Nigeria’s state oil, the Nigerian National Petroleum Company Limited (NNPCL)
According to a Reuters report, the biggest African refinery will receive six cargoes of crude oil in December for a test run.
Source: UGC
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Delivery to start by December
As part of a one-year deal, one source in the NNPC said six cargoes, or 200,000 barrels per day would be delivered by the NNPC by next month. The source, however, added that in the future volumes will be supplied based on mutual agreement and availability.
Another source from the NNPC official estimated at least 4 to 5 cargoes or 130,000 barrels per day. He added that some of the agreements have confidentiality clauses.
The development is, however, expected to improve trading in the Atlantic Basin.
It is expected that the Lekki refinery will become an oil powerhouse once it is fully up and running.
In addition, Africa's biggest refinery with 650,000 barrel per day capacity would make Nigeria a net exporter of fuels
NNPC had ignored Dangote
This comes after an earlier report by Legit.ng that the NNPCL is shunning Dangote Refinery to swap crude oil for a loan with other entities.
The Executive Director, of Dangote Group, Devakumar Edwin, in an interview with S&P Global Commodity Insights, said that the NNPCL had committed its crude to other organisations.
Meanwhile, recent data from the Nigeria Extractive Industries Transparency Initiative (NEITI) highlighted why the NNPC ignored Nigerian refineries and swapped oil for refined products.
The report shows that the NNPCL traded crude oil worth N2.6 trillion for refined petroleum products in 2021.
Oil Companies Give Dangote Tough Condition to Supply Crude Oil for Refinery Ahead of Operation
Nigeria’s Local oil producers have expressed their wishes to be paid by local refiners in US dollars, the currency of their operation, Legit.ng reported.
They made this known in a meeting with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to activate domestic crude supply obligations.
Responding to the request of members for dollar payment, the Chief Executive of the NUPRC, Gbenga Komolafe noted that since the law is based on a willing buyer, willing seller structure, the currency of purchase could be in naira or dollar.
Source: Legit.ng
