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NNPC reportedly in talks to acquire stake in Dangote refinery

May 31/2021

MOSCOW (MRC) -- Four oil firms including Nigeria's state-oil company have approached Dangote Industries to acquire a stake in Africa's largest oil refinery, a senior executive told Reuters.

Devakumar Edwin, group executive director, said the firms from Western and Middle East countries and involved in trading and crude production were looking to secure crude supply agreements, a similar objective to that pursued by the Nigerian National Petroleum Corporation (NNPC). "They are seeking to have 20% minority stake in Dangote refinery as part of collaboration ... so that they can sell their crude," Edwin told Reuters by telephone.

He said Dangote refinery is not looking for equity and the company wants to be able to secure crude from the market. Nigeria, Africa's biggest crude oil exporter, imports virtually all of its fuel due to moribund state refineries, which has prompted the state oil company's interest in the 650,000 barrel per day (bpd) Dangote refinery.

NNPC's spokesman, speaking to Reuters in a phone interview, said the corporation had considered the idea of acquiring a stake in the USD19.5 billion oil refinery project owned by Africa's richest man, Aliko Dangote. Edwin said the refinery is scheduled for mechanical completion this year with commissioning by January 2022.

Nigerian billionaire Dangote, who built his fortune in cement, first announced a smaller refinery in 2013, to be finished in 2016. He then moved the site to Lekki, in Lagos, upgraded the size and said production would start in early 2020. The company has held talks with firms including Vitol(VITOLV.UL) and Trafigura (TRAFGF.UL) over the supply of crude and lifting of petroleum products for sale abroad.

Nigeria lost its biggest customer, the United States, after it start producing shale oil. The U.S. is now pushing into some of Nigeria's most valued markets, Edwin said.

As per MRC, Africa's largest oil refinery will deliver its fuels to Nigerian consumers via roads and sea ports, and will effectively replace all of Nigeria's fuel imports once fully operational. The 650,000 barrel-per-day Dangote oil refinery is under construction in Lagos, the biggest city in the most fuel-consuming nation in the region, which absorbed 266,000 barrels of petroleum products per day as of 2015. Congested ports and dilapidated roads led some to expect that the company would build a pipeline or other method of getting its fuel to consumers.

The Dangote group is also eyeing ethanol production at its sugar and molasses plant in Adamawa state, and has facilities at the refinery to blend ethanol with fuel if needed. Edwin said they are also already considering expanding plastics and petrochemical productions at the refinery, which will make polyethylene and polypropylene when it begins production.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, PP, PE, neftegaz, petrochemistry, NNPC, Nigeria, Russia.
Category:General News
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