The Dangote refinery is one of the largest megaprojects launched in the Epe region of Lagos State, Nigeria. The refinery, which is expected to process 650,000 barrels of oil per day, is located in the Lekki Free Trade Zone.
In this article, we’ll go over how and when the refinery kicked off, the current state of the refinery, and its benefits to Lagos and Nigeria as a whole.
How the project started
The richest man in Africa, Aliko Dangote, first made mention of the project in 2013 and planned to kick off its development in 2016, but due to some developmental setbacks and land allocation, the project didn’t kick off until 2017.
Before the commencement of the project, the refinery was estimated to cost about 9 billion dollars for completion. Dangote Group threw in 3 billion dollars from the start, while the remaining funds needed were sourced through loans and private investments.
The refinery was initially planned to be completed in 2019 and fully operational by 2020, but COVID-19 had another plan for mankind alongside some financial obstacles. In 2022, the richest man in Africa had to borrow approximately 187 billion naira to complete the refinery.
Over the period when development was ongoing, the refinery launch date was shifted three times in four years. The postponement caused a lot of uproar among the people who assumed the project was just to launder money. Investors panicked that the project may never be completed, even though NNPC also promised the existing refineries in the country would be revamped and set to start operation again in 2023.
Inauguration of Dangote refinery
In January 2023, the completion of the refinery was announced, and on May 22, 2023, the refinery was inaugurated and set to start operation in the last quarter of 2023. It was stated that the refinery will start producing diesel and kerosene first in October 2023 and start the production of gasoline a month later.
This never came true because there was a delay in the delivery of crude oil to the refinery. This event caused another public reaction because of the initial doubt people had after the launch date was postponed three times in four years.
The tension was calmed after another statement was made that the refinery would start operation in December 2023 with an initial delivery of 6 million barrels of crude oil.
Delivery of crude oil to Dangote refinery
On December 7, the refinery received its first delivery of one million barrels of Agbami crude oil through Single Point Mooring, which is a floating facility for receiving liquid-based cargo off the coast. The next one million barrels of crude oil were delivered on December 19.
After these deliveries, it was announced that the production of diesel will kick off in the second week of 2024, while other products will start later in the year.
So far, the refinery has received five million barrels of crude oil as of the time the article was posted.
Who owns the Dangote refinery?
The Dangote refinery is owned by the Dangote Group. Just like it was mentioned before, the company invested three billion dollars into the project from the start. In total, it was stated that 50% of the funds came from Dangote Group, while the remaining 50% was financed by banks.
Total cost of developing Dangote refinery
The total cost of completing the refinery was estimated to be nineteen billion dollars. The refinery was disclosed to be Africa’s largest oil refinery and the world’s largest single-train facility. Aside from Dangote Group having the major shares in the development of the refinery, Aliko Dangote himself also has approximately 5.5 percent of the shares.
Impact of Dangote refinery on the Nigerian economy
When the refinery becomes operational, it is estimated to provide approximately 130 thousand jobs and cater to 12% of Africa’s product demand, which will eventually reduce the cost and import rate of petroleum products by nearly 36%. The refinery will open a gateway for the cosmetics and plastics industries to function effectively.
Impact of Dangote refinery on the real estate market in Epe
It is no longer news that the Dangote refinery is located in the Lekki Free Trade Zone, which is in close proximity to Lekki Lagoon and Epe town. This single project has brought Epe to the map, and literally all real estate brokers have kick-started one or two estate projects in the local government.
It has been predicted that Epe will be the next Victoria Island luxury environment in Lagos State, Nigeria. Currently, the return on investment on properties and land in Epe is 50% to 100%. This figure is expected to increase to 500% in a few years or a decade.
So if you buy land for 2 million naira now in Epe, you’re expected to have a return on investment of 10 million naira to 20 million naira in 5 to 20 years.
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FAQs
Is Dangote Refinery the largest refinery in the world?
Dangote refinery is not the largest in the world, but it is the largest in Africa and the largest single-train refinery in the world.
Which area is the Dangote refinery located in?
The Dangote refinery is located in the second quadrant of the Lekki Free Trade Zone, which is in close proximity to the Atlantic, Lekki Lagoon and Epe town.
Which refinery is the largest in the world?
The largest refinery in the world is the Jamnagar Refinery, which processes 1.24 million barrels of crude oil per day.
How many crude oil refineries are in Nigeria?
There are four oil refineries in Nigeria. Two in Port Harcourt, one in Kaduna, another in Warri and the last one in Lekki, Lagos, Nigeria.
What is the cost of the Dangote refinery?
It was estimated that 19 billion dollars completed the refinery, with Dangote Group being the majority shareholder.
