Dangote to Build Another Mega Refinery for $17bn, Nigerians Can Invest
- Dangote Group has confirmed plans to build a new $17 billion oil refinery in Kenya, marking its biggest refining investment outside Nigeria
- The proposed refinery will be financed through internally generated funds, bond issuances and proceeds from a planned IPO.
- The refinery, to be located on Lamu Island, is expected to strengthen East Africa's energy security and reduce reliance on imported refined petroleum products
Legit.ng journalist Dave Ibemere has experience in business journalism, with in-depth knowledge of the Nigerian economy, the stock market, and broader market trends.
Dangote Group has revealed plans to build a mega oil refinery in Kenya, estimated to cost $17 billion, as the Nigerian conglomerate expands refining capacity in Africa.
The project, planned on Kenya’s Lamu Island, will process 700,000 bpd, eventually becoming the largest refinery in East Africa and cutting the region's dependence on refined fuel imports.
Source: UGC
Dangote confirms Kenya as refinery location
The planned Kenyan refinery will be a clone of the one operating in Lagos and will cost some $17 billion, according to Bloomberg.
It was originally planned for Tanzania but was later moved to Kenya after consultation with regional leaders.
Edwin Devakumar, the vice president of Oil and Gas for Dangote Industries, told Reuters:
"Preliminary work has already started. The site has been selected, soil tests are under way, and design and engineering work has commenced. Kenya was the choice from the beginning."
For funding, Devakumar stated that the company's new refining venture will be funded through internal generation, bond sales and the proceeds of an impending IPO, which he said could be announced as early as October, giving Nigerians an investment opportunity.
He refused to disclose a precise figure for the investment, but stated it will be in line with the cost of the Dangote refinery in Lagos, which eventually exceeded $20 billion, Punch reports.
Dangote expands refining business across Africa
The Lagos refinery officially commenced operations and has been key to ending fuel scarcity and reducing imports in Nigeria.
The Kenya project would represent Dangote Group's single largest investment outside Nigeria. It is part of a wider drive to boost Africa's refining output, alongside plans to raise the Lagos refinery's capacity from 650,000 bpd to 1.4 million bpd by 2028.
Africa currently exports roughly three-quarters of its crude oil production while importing approximately 70% of its refined petroleum products, according to estimates from the African Petroleum Producers' Organisation.
A refinery of this scale in East Africa would meaningfully reduce the region's dependence on imported fuel and position Kenya as a central hub for petroleum supply across neighbouring countries.
Source: Getty Images
Dangote Refinery opens petrol sales to all marketers
Earlier, Legit.ng reported that Dangote Petroleum Refinery has opened the sale of petrol to all licensed marketers, ending its previous consortium marketing arrangement.
The move is expected to reshape competition in Nigeria's downstream petroleum sector.
The refinery said all qualified marketers can now purchase products directly from its loading gantry, widening access to locally refined petrol and allowing more participants to source fuel without going through intermediary arrangements.
Source: Legit.ng
