By Emmanuel Ufott
Positive indications are rife that the 11 billion dollar 650,000 capacity refinery constructed by Dangote Group to ease petroleum supply in the country and the $2 billion granulated urea fertilizer plant both located in Lagos is nearing completion and barring any unforeseen development should be ready between December 2020 and next year. The status of the refinery which on record remains the biggest and costliest project of theAfrica’s manufacturing giant was disclosed last week by the Group.According to the Executive Director, Strategy, Capital Projects and Portfolio Development,Dangote Group, Devakumar Edwin, the refinery has reached 80% completion, adding thatengineering and construction were 100% over while procurement was 98 per cent ready. “If you look at the overall percentage completion we are at 80%. But that overall includesengineering and design, which is 100%. Procurement is about 98% over. So, it covers variousaspects. But the core activity which is going on today is construction. So, if you look atexclusively construction, we have finished 60 per cent of construction. But overall, it is 80%level. The progress is going reasonably well.
“We had the impact of corona virus because many of the countries where our equipment arebeing manufactured were affected.“So, now, we hope to complete everything – all the assembling by the middle of next year. Then,we will start the commissioning process. Middle of next year, we start the commissioningprocess, and it’s a huge refinery, the commissioning process may take three to four months.“And then with start of products coming into the market. So, by last quarter next year, we shouldhave our products coming into the market.”On the impact of the refinery on the price of petrol in the country, he said the basic economicprinciple of demand and supply would determine that.Edwin stressed optimism that the increase in refining capacity in the country resulting in the risein supply of petroleum products will bring the price down as was the case in the cementsubsector in the country.“This is a basic economic principle: demand and supply. When the demand exceeds supply, theprice will go up. When the supply exceeds demand, the price will come down. You can see it inthe refinery too. BUA too has announced that they are going to put up 200,000 barrels per dayrefinery. And you can see a lot of cottage refineries coming up – 5,000 barrels, 3000 barrels. Soas more capacity comes in, the philosophy of demand and supply will automatically act. Petrolprice will not crash in one day but with a period of time it will come down to almost half theprice currently,” he added.
He further explained that the group’s primary aim of venturing into building petroleum refinerywas to add value to the country, especially as the nation’s foreign exchange has been gettingweak over the years.“One of the primary reasons foreign exchange is just getting drained out is fuel. You, people,know the acute crisis we are facing in dollars. I have been with you for 29 years,
I have neverseen this kind of crisis. There is something really radically wrong somewhere.“Even during Abacha’s time when it was $8 per barrel, we didn’t face this kind of crunch. So ifyou have this kind of refinery, the forex outflow will be minimized, the currency destabilisationwill stop.“By the grace of God, probably the currency can even get strengthened because after all, a lot ofnaira is chasing a few dollars. So your dollars can be saved within the country.” Beyond the economic importance of the refinery, he noted that it will also offer employment toover 240,000 people. The refinery project currently has 20,000 employees working to deliver iton schedule. People Edwin emphasized that job creation was one of the key focus of thePresident of Dangote Group, Alhaji Aliko Dangote in mooting the project having noted withconcern the rising unemployment in Nigeria. On the state of the fertilizer plant which is another big project on the cards of the Group with theaim of boosting agriculture in the country. Dangote Group, similarly disclosed that the $2 billion granulated urea ferliser plant located at Ibeju Lekki, Lagos will begin operaon before the end of December 2020.
This cheering news was conveyed by the Group Head, Corporate Communications, Dangote Group,@Anthony Chiejina recently. Chiejina confirmed that the project will be ready for production by the end of December this year given the fact that the pre-testing had already been done since and the smooth take off was delayed by the Covid-19 pandemic. “The project will be ready for take-off before the end of December. The pre-testing has already been done and the delay in starting operations was due to the COVID-19 pandemic.”Aliko Dangote, Chief Executive Officer, Dangote Group, had in February projected that the plantwould begin operations in July.The $2 billion fertilizer plant which the Group said would be the largest fertiliser plant in the world has a three million tonnes per annum capacity. According to Chiejina, the plant when commissioned and begins production would make Nigeria the only urea exporting country in Sub-Saharan Africa; adding that the fertilizer as well as petrochemicals plants were capable of generating $2.5 billion annually.According to him, the amount is almost 10 per cent of what Nigeria is getting from home remittances, which is one of the highest in the world.Dangote Group which has made a name in Africa as cement manufacturing giants hopes to elevate its manufacturing prowess in the petroleum sector with its in road into the oil industry.