The ambitious refinery project Dangote, initiated by Nigerian industrialist Aliko Dangote, represents a real revolution in the African energy sector. Located in Lekki, near Lagos, this facility has become the largest refinery in Africa with a daily processing capacity of 650,000 barrels of crude. From its start, it has aimed to meet the growing needs for quality fuels on the continent but also for export, in accordance with international standards, in particular European standards for jet A1.
Recently, BP initiated the transport of its first cargo of jet fuel from the Dangote refinery to Rotterdam, marking a turning point in European energy supply. This first shipment, made by the ship Doric Breeze on May 27, included 45,000 metric tons of jet fuel, according to data from S&P Global Commodities at Sea. This event illustrates the rapid expansion of the refinery’s operations and its growing influence on trade flows in West Africa.
In addition to BP, the Spanish company Cepsa also participated in the tender, securing a significant share of the European market. Traders anticipate that Cepsa’s deliveries will strengthen Dangote’s fuel presence in Europe, an already saturated market. This arrival of new quantities of fuel could put further pressure on local prices which, according to assessments by Platts of Commodity Insights, have already seen a significant decline.
In the face of this abundance, arbitrage between the Persian Gulf and Europe became unprofitable, with the window of opportunity quickly closing with futures moving into contango, indicating immediate market weakness. This phenomenon was recorded on May 29, revealing a market structure that had not been this low since April.
Alongside its jet fuel exports, Dangote has diversified its export products, including naphtha, fuel oil and diesel to various global markets. However, a reorientation is planned with the upcoming reduction of naphtha exports in favor of gasoline production, once the plant’s catalytic cracker is operational.
The Dangote refinery is not only transforming the Nigerian energy landscape; it is poised to become a major player on the global energy scene. With plans for continued ramp-up, it could make Nigeria a net exporter of jet fuel by the fourth quarter of 2024, while setting the stage for sustained production of ultra-low sulfur fuels meeting European requirements.
