TheCable

The new $9 billion oil refinery to produce 500,000 barrels per day being developed by Africa’s richest man, Aliko Dangote will come onstream in Nigeria by 2017.

This was disclosed to Reuters by Mansur Ahmed, executive director of stakeholder management and corporate communications, Dangote Industries Ltd, at an African refiners conference in Cape Town, South Africa.

The refinery, to be located in Lagos, will cut reliance on international markets for Africa’s largest oil producer, which imports more than 80 percent of its fuel needs.

“By the third quarter of 2017, we expect to be looking at commissioning,” he said.

The refinery is being designed to process Nigerian crude mix and produce products conforming to Euro V fuel specifications, as fuel demands across the continent are forecast to rise rapidly with many countries enjoying strong economic growth.

Poor infrastructure, competitive global markets and financial constraints have traditionally held back Africa’s refining capacity, while fuel subsidies in Nigeria are also an issue, Ahmed, who spoke on behalf of Dangote, explained.

Ahmed said the refinery, which is being funded by debt and equity, including a $3 billion commitment from Dangote himself, could list in future should additional capital be needed.

“In the past when we have reached a point where we feel we need to increase capital we have listed,” Ahmed said.

“We have listed our cement business, we have listed our sugar business and our salt business… and, if you like, history is the best teacher.”

The Dangote Group has interests ranging from cement to basic food processing to oil and gas.

The lack of sufficient refining capacity is a major handicap in Africa’s biggest economy and a boost to its refining capacity would be a blow to European refiners and oil traders, which make huge profits bringing gasoline into the country.

In February, construction work began on the refinery, which the group says will be the single largest in the world.