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02
November
2022

Dangote Refinery to account for over half of Africa’s medium-term refining additions – OPEC

The Organization of Petroleum Exporting Countries has said that in the medium term, Dangote refinery capacity accounts for more than half of Africa’s expected distillation additions. OPEC stated this in its World Oil Outlook, launched on October 31.

OPEC wrote: “In Africa, medium-term distillation additions are estimated at around 1.2 mb/d. More than a half of this number is accounted for by Nigeria’s 650 thousand barrels per day (tb/d) Dangote refinery.”    

Africa’s expected refining projects: Dangote refinery is the largest of all expected refinery additions or expansions across Africa in the medium term. Aside from Dangote refinery, some expected refining projects in Africa include:

  • The 100 tb/d refinery to be built in Soyo, Angola 
  • The 110 tb/d Hassi Messaoud refinery expansion in Algeria 
  • The 160 tb/d Midor refinery expansion in Egypt 
  • The 10 tb/d Brahms modular refinery in Guinea.   
  • The 110 tb/d Pointe Noire II refinery in the Republic of Congo   
  • Ghana and Senegal are also expected to commission new units, most of which are modular. 

Expansions could address fast-growing demand in Africa: According to OPEC, these new project development and expansions could address fast-growing demand in Africa, chief among them, the Dangote refinery.  

  • Although the projects in the pipeline will address some level of demand, in the long run, the total required long-term refining capacity additions needed in Africa are estimated at 3.4 million barrels per day (mb/d), driven by Africa’s strong demand growth.  
  • These additions would help not only to cover demand growth but also to reduce product imports in some countries. Continuous competition with product inflows from other markets and problems related to project financing and finalization remain the main challenges for the continent in building the required capacity on time. 
  • Any delays and/or cancellations would necessarily lead to higher product imports. The OPEC outlook stated that according to recent reports, the Dangote refinery commissioning is likely to be delayed from 2022 to 2023, partly due to financial issues.  

Nigeria to have increased capacity: According to the OPEC outlook, Nigeria is likely to see the addition of a number of small modular refineries with capacities of up to 20 tb/d over the medium term, thus adding much-needed capacity in the country. 

The potential cumulative refining capacity increases to above 1 mb/d by 2027, mostly due to announced expansions in West Africa, such as Dangote in Nigeria.  

The Warri, Port Harcourt and Kaduna refineries in Nigeria are currently undergoing renovations. In the OPEC outlook, it is stated that Africa has a large number of non-operating refineries, some of which are undergoing refurbishment. If the refurbishments succeed, Africa could expect even higher throughputs and utilization rates in the long term. 

These additions could lead to refinery throughputs increase from 1.8 mb/d in 2021 to 4.8 mb/d in 2045, based on strong demand growth and refining capacity additions in both the medium- and long-term 

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