EXCLUSIVE: NNPC Limited To Supply Six Million Barrels Of Crude Oil To Dangote Refinery In December

…Sends Sales & Purchase Agreement To Dangote For Signing

…Crude Oil To Be Sold To Refinery At International Price

The Nigerian National Petroleum Company Limited will, from December this year, release six million barrels of crude oil to Dangote Refinery and Petrochemicals Limited for the take-off of the multi-million dollars facility, THE WHISTLER can authoritatively report.

The $19.5bn Refinery reputed to be the world’s largest single-train Refinery was commissioned by former President Muhammadu Buhari on May 22 this year.

But five months after its inauguration, the plant has finally reached full technical completion and secured necessary platforms for feedstock supply.

But multiple sources from the Nigeria Upstream Petroleum Regulatory Commission and Dangote Refinery confided to THE WHISTLER that crude oil allocation has been made by the NNPC Limited to Dangote Refinery.

Specifically, one of the sources said that the allocation was made today with the conclusion of the Sales and Purchase Agreements for crude oil supply with NNPC.

The move, it was further gathered, is in line with the Petroleum Industry Act which requires supply of crude oil to all producers of crude.

Section 109 of PIA introduces the domestic crude oil supply obligation in the oil industry in a bid to ensure crude oil supply to local refineries.

The PIA stipulates that the supplier of crude oil to the domestic market shall be on a willing buyer and willing supplier basis.

Another source told THE WHISTLER that the NNPC Limited will also buy petroleum products from Dangote Refinery and this will be priced at the internal price mechanism as any other buyer.

The President of the Dangote Group, Aliko Dangote, had described the NNPC Limited as a responsive partner that will provide the needed support for the commencement of operations at the 650,000 barrels per day Refinery.

Dangote had in September this year said the Mele Kyari-led NNPC was ready and willing to supply the Refinery with crude oil to enable the commencement of refining operations at the facility.

He noted that the NNPC had been very encouraging and supportive in their business trajectory in the areas of oil and gas.

Through the Refinery located at the Lekki Free Trade Zone, Lagos Dangote intends to make Nigeria self-sufficient in fuels and free a huge volume for export.

Located in Ibeju-Lekki, Lagos, it covers a land area of approximately 2,635 hectares, which is seven times the size of Victoria Island.

The Refinery is the biggest refinery in Africa and also the biggest single-train refinery in the world. A single-train refinery uses an integrated distillation unit or one Crude Distillation Unit (CDU) to refine crude oil into various petroleum products, as against the use of multiple distillation units by big refineries.

Due to the large capacity of the refinery, its pipeline infrastructure is the largest anywhere in the world, with 1,100 kilometres to handle three billion Standard Cubic Feet per day (Scf/d) of gas.

The Refinery has a 435MW-capacity power plant that is able to meet the total power requirement of Ibadan Electricity Distribution Company (IBEDC).

The Refinery has the capacity to meet 100 per cent of the Nigerian requirement of all refined petroleum products, such as petrol – 53 million litres per day; diesel – 34 million litres per day; kerosene – 10 million litres per day; and Aviation Jet, two million litres per day. There is also surplus of each of these pro

The NNPC has already taken 20 per cent equity stake in the Refinery and will from this week start supplying 300,000 Barrels of Crude oil per day to the facility.