- NNPC terminates DSDP contracts
Indication were that the granted the Chairman of Dangote Group and President, Dangote Refinery and Petrochemical Company, Alhaji Aliko Dangote, licence to begin the importation of Premium Motor Spirit (PMS) or petrol into the country pending the completion of the 650,000 barrels per day plant at Lekki, Lagos.
Sources close to the Presidency disclosed that the imported fuel would be discharged at Dangote barge and pumped into tanks and would sell at market dictated price to marketers while work progresses at the refinery.
The choice of Dangote to bring in the product was informed by NNPC’s 20 per cent minority stake in the refinery. Dangote refinery can boast of 4.742 billion litres storage capacity, the biggest in Africa. NNPC is investing $2.76 billion in the plant which was paid in cash. The second payment would be through crude sales, and the last payment would be through profits made by the company.
Another one third of the money, it was learnt, will be paid through supply of crude, with the deduction of a maximum of about $2 and some cents. And then the one third of it, which is another $850 to $900 million, will be paid from the profit they are going to make from the business.
“So it’s not a cash transaction where they are paying all cash. You can see that if we don’t have confidence in what we are doing, we will have asked them to pay all cash.”
The refinery was commissioned by the immediate past President, Muhammadu Buhari, on May 22, 2023 with pomp and ceremonies. He was accompanied on the occasion by other West African countries’ presidents.
At the commissioning, Dangote said that the first refined petroleum products from the refinery would hit the market before the end of July or August 2023. But checks revealed that the $19 billion refinery was at 88 per cent completion stage with some equipment still being expected to be delivered by their manufacturers while those that have been fitted were yet to pass integrity test at the point of commissioning.
Besides, work on production lines including electrical works are largely behind schedule, it was gathered. “With equipment still being expected and an integrity test yet to be conducted, I don’t see the refinery coming on stream until March 2024, the main reason why Dangote was granted a permit to import fuel pending the completion of work on the refinery,” the source said.
The pipeline infrastructure at the refinery is said to be the largest in the world, with 1,100 kilometres and will handle three billion standard cubic feet of gas per day. Dangote had noted that beyond the commissioning ceremony, the first goal would be to ramp up production of the various products to ensure that within this year, the refinery could fully satisfy the nation’s demand for quality products.
“Your excellencies, distinguished guests, our first product will be in the market before the end of July or beginning of August this year,” Dangote had said, adding; “We have built a refinery with a capacity to process 650,000 barrels per day in a single train which is the largest in the world. We have selected the best plants, equipment and the latest technologies from across the world.”
