Dangote Refinery Secures One Million Barrels of Algerian Crude Amid Production Ramp-Up

The Dangote Petroleum Refinery has taken a significant step in its quest for operational efficiency, securing a fresh shipment of one million barrels of crude oil from Algeria.

According to a report by Argus Media, sources revealed that the refinery purchased the crude cargo from Glencore, a global commodities trading giant, in February. The delivery is expected to arrive between March 15 and March 20. However, neither Dangote Refinery nor Glencore has officially confirmed the transaction, and the financial details of the deal remain undisclosed.

Notably, Argus Media highlighted that no tankers departing from Algeria in February had flagged Africa as their destination, suggesting that the cargo meant for Dangote will load in March.

Industry analysts suggest that the Saharan Blend, a high-quality light crude oil from Algeria, is well-suited for Dangote’s processing needs. The report also noted that Saharan Blend is competitively priced compared to similar Nigerian crude grades.

“Nearly 420,000 barrels per day (bpd) of crude have been delivered to the Lekki-based refinery so far this year, with approximately 82% comprising light sweet grades,” the report stated, citing data from energy analytics firm Vortexa. It further revealed that Nigerian crude accounted for 87% of all supplies received by the refinery.

The report indicated that Saharan Blend’s trading in March has been sluggish, mainly due to seasonal refinery maintenance in Europe and a surplus of light crude supply. This has prompted European buyers to delay purchases, leading sellers to seek alternative markets, including Africa.

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The price of Saharan Blend crude reportedly fell by $1 per barrel in February, with March-loading cargoes trading at a discount of 20 cents per barrel to North Sea crude benchmarks.

This latest purchase follows Dangote Refinery’s recent acquisitions, including an anticipated 12 million barrels of crude from the United States in February. As part of its efforts to reach full-scale production, the 650,000 bpd facility previously received around 24 million barrels of Nigerian crude in October and November last year.

Edwin Devakumar, Vice President of Dangote Industries Limited (DIL), recently stated that the refinery could achieve full operational capacity within 30 days. Meanwhile, Aliko Dangote, Chairman of DIL, assured Nigerians that the refinery has over N600 billion worth of premium motor spirit (PMS) in storage, enough to meet the nation’s fuel demand.