Mini-refineries in Race With Dangote to Solve Nigeria’s Fuel Crisis

In the race to solve a fuel-import crisis in Nigeria, Africa’s richest person faces competition from a swarm of tiny challengers.

Billionaire Aliko Dangote is building a 650,000 barrel-a-day refinery in Nigeria that will help cut the nation’s $7 billion annual fuel-import bill. Such is the pressure on its finances that the government is pursuing another option: giving licenses to mini refineries, some of which have capacity of as little as 1,000 barrels a day. If all the small processors are built, their collective output would surpass Dangote’s giant facility.

Nigeria is desperately trying to revive an industry that has languished for years. Decrepit state refineries operate far below their capacity, forcing the country to import 90 percent of its oil products even as it exports large volumes of crude. Of 40 modular refineries registered, 10 are in advanced stages of development and could be producing fuel as early as next year, Oil Minister Ibe Kachikwu said recently.

Many of Nigeria’s oil fields are scattered around the vast delta in the country’s south, which is often difficult to access and operate in. Setting up large infrastructure projects in the swamps isn’t always easy. The small-is-better philosophy also received a boost when Bank of Industry Ltd., a closely held state-owned lender, secured a $500 million loan from China in September for lending to modular refineries projects.

 

Source: Energy Mix Report

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