Huge Nigerian oil refinery on track for finish next year, Dangote insists

Nigerian billionaire Aliko Dangote said he’s on schedule to finish by next year his $15 billion oil refinery, which will be one of the world’s biggest, despite analysts saying the timeline is ambitious.

“There are quite a lot of challenges, but we’re moving,” Mr Dangote said at a conference in Paris about the plant, which is being built near Lagos, Nigeria’s commercial capital, and designed to process 650,000 barrels of crude daily. “We’re still targeting next year for commissioning.”

The 61-year-old said he will export about 35 per cent of the refinery’s products, while the rest will serve the local market. His Dangote Industries said last year the plan is to produce about 50 million litres a day of petrol and 15 million litres of diesel, though output can be changed according to demand. The company has been in talks with oil traders including Royal Dutch Shell, Vitol Group and Trafigura Group  about them supplying crude and buying refined fuel.

Analysts have questioned whether Mr Dangote, worth $10.8bn according to the Bloomberg Billionaire’s Index, will be able to complete such a huge project on time and within costs. Edinburgh-based Wood Mackenzie doesn’t see the refinery starting production until 2022.

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The complex will include a $2.5bn fertiliser factory with a capacity of 3 million tonnes annually, set to be ready this year, and a petrochemical plant. They will be powered by gas, which will be sent from the Niger River delta via two 550 kilometre underwater pipelines, also costing Dangote about $2.5bn.

“By next year, we’ll be exporting almost 2 million metric tons of urea and ammonia,” Mr Dangote said.

His comments come as French oil and energy group Total said it will formally approve a decision to proceed with the Ikike project in Nigeria in the coming months.

"There is a huge potential in Nigeria, it is probably the most prolific country in west Africa in terms of oil and gas and it is time to launch new projects and we are working on many of them," said chief executive Patrick Pouyanne, speaking at the same event as Mr Dangote.

Total is one of the strongest players in the African oil sector, holding the largest proven reserves on the continent among the world's top oil companies, Reuters said.

Earlier this month, Total started production at the Egina oilfield off the coast of Nigeria.