The 650,000 barrels per day Dangote Refinery may not be able to supply Premium Motor Spirit (PMS), also known as petrol, to the domestic market in May as initially anticipated. The delay stems from the installation of a residue fluid catalytic cracking unit (RFCCU), which is essential for refining gasoline sustainably. CONTINUE READING
Industry insiders indicate that the RFCCU is a more advanced version of the Fluid Catalytic Cracking Unit (FCCU) and is causing delays in the refinery’s efforts to commence petrol production. Despite repeated attempts, Dangote Group’s spokesman, Tony Chiejine, has not responded to requests for confirmation.
The Fluid Catalytic Cracking Unit (FCCU) is a refining component that converts heavy crude oil into lighter products, such as liquefied petroleum gas and gasoline. The FCCU employs a chemical process called cracking to break down large hydrocarbon molecules into smaller ones using a catalyst and extreme heat. Common catalysts include zeolite, bauxite, silica-alumina, and aluminum hydrosilicate. After the FCCU process, the product proceeds to a hydrocracker for further refinement.
Initially, the Dangote Refinery was expected to supply gasoline to marketers by May 2024. The refinery has already distributed diesel and aviation jet fuel, leading to a drop in their retail prices.
Bloomberg had reported that the new mega-refinery would supply PMS to the domestic market in May, significantly reducing Nigeria’s dependence on imported petroleum products. The refinery, which began operations in January, exported its first batch of products last month, including low-sulfur straight run fuel oil and naphtha. It currently operates at 350,000 barrels per day, with plans to increase to maximum capacity.
However, analysts at Standard and Poor’s Global Commodities Insights project that the Dangote Refinery will start supplying petrol in the fourth quarter of this year, rather than the previously announced May timeline. Kelly Norways, an African energy expert at S&P, stated that the Nigerian government expects a substantial portion of the supply to be allocated to the domestic market.
“In reality, when we see that start scale up is still subject to debate,” Norways said. “Dangote has recently been espousing some punchy timelines. They have most recently been saying that they are looking to produce gasoline by May. But in reality, our analyst expects that it would be something like the fourth quarter of this year in a more realistic timeline.”
The discussion also highlighted the changing dynamics of petroleum product flow into West Africa in recent months, with reduced supply from traditional sources like the Netherlands due to quality improvements and new regulations.
The Dangote refinery was officially commissioned in May 2023 but has faced operational delays. However, it began receiving crude oil in December and started distributing diesel to local marketers in March. CONTINUE READING
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