Earlier this month, I had the opportunity to visit what will soon be the sixth largest crude oil refinery in the world, and the world’s largest single-train refinery. At the Dangote refinery, I had the opportunity to pose in front of a 3,000-ton hydrocracking reactor, providing perspective on the scale of the operation. This $12 billion, 650,000 barrel-per-day refinery will complement other major infrastructure investments that Dangote has planned at the strategically located Lekki Free Trade Zone in Lagos, including a port, gas processing facility, power plant, and petrochemical and fertilizer complex. When completed, this infrastructure complex will create a significant economy of scale for one of Africa’s largest industrial conglomerates, supporting jobs in both Nigeria and the United States.
Dangote’s refinery will help Nigeria meet and exceed its current demand for gasoline, diesel, jet fuel and kerosene, leaving ample product for export. This connotes significant positive economic impact on Nigeria and the West African region, transforming Nigeria from a net importer to exporter of refined petroleum products and curtailing significant foreign exchange outflows. Additionally, the availability of excess fuel will also provide a catalyst for eliminating Nigeria’s expensive fuel subsidy, which costs the federal government over $2 billion annually and will advance Nigeria toward a fully market-driven fuel-pricing regime.
An undertaking of this scale requires significant project planning and preparation, which is where the U.S. Trade and Development Agency (USTDA) played a role in the development of this milestone infrastructure. With over 30,000 workers and over 500 cranes on site, effective project management is crucial. The Dangote refinery has acquired technology and personnel from all over the world and has collaborated with international institutions. The refinery has trained over 1,000 engineers to global standards, which in part was funded by a USTDA grant, supporting U.S. jobs in the process. Incorporating technology from the U.S., Europe, Asia and Australia, the Dangote refinery is truly a global endeavor and demonstration of world class project preparation, planning, collaboration and implementation of high-quality infrastructure.
If operation mirrors preparation, the Dangote refinery could serve as an ambassador for privately developed African infrastructure projects that have historically been the preserve of federal governments, creating an investment class with the capacity to deliver significant returns without sovereign guarantees and creating several thousand Nigerian and U.S. jobs in the process.
About the Region
The Lekki Free Trade Zone straddles the Atlantic Ocean and the Lagos lagoon, providing access to both deep offshore and inland waterways. A network of 684-mile subsea pipelines will supply gas from the Niger Delta to the facility in Lagos, providing a safer, less accessible offshore alternative to the existing Escravos Lagos Pipeline System (ELPS), which is the primary trunk line for inland gas transportation across Nigeria. The Dangote group recently signed a deal with Chevron to supply gas to the fertilizer plant located within the complex.