Nigeria's 650,000 b/d Dangote refinery has confirmed plans to expand capacity to 1.4mn b/d by 2028.
Chairman Aliko Dangote said the company aims to add a second 750,000 b/d processing line at its site in Lagos, largely replicating the existing plant, which began commercial operations last year. Lessons from the first build and existing infrastructure will allow the second line to be delivered more quickly, he said.
A doubling of capacity was part of the original design, but the company opted to assess performance before committing to expansion. It has now decided to proceed with the second line within three years, Dangote said.
"Upon completion, this will make it the largest refinery in the world, ever — surpassing Reliance's [1.2mn b/d] Jamnagar refinery in India," Dangote said on 26 October.
He added that an agreement with a refinery technology licensor was signed earlier that day, without naming the firm. The company previously said most processes at the existing plant were licensed from US engineering firm Honeywell UOP.
The expansion is underpinned by rising regional demand. "There is quite a lot of demand, really, within the African region, especially west Africa and... east Africa," Dangote said, citing interest from Ghana, Angola and elsewhere. He said the refinery's current capacity is not enough to meet demand.
Dangote told Argus in July that the firm was considering expanding capacity to 700,000 b/d, but gave no timeline. He now says debottlenecking the existing plant to reach that level should be completed by early 2026.
The refinery will also be listed on the Nigerian stock exchange in 2026, with no plans for an international listing. A 10pc stake will be offered to the public, the company said in a statement to Argus. But Dangote added that as many shares as needed to meet domestic demand will be made available — potentially up to 30pc. He said projected revenues of around $55bn/yr and diversification into petrochemicals should reassure investors.
The expansion will also involve increasing polypropylene output from 900,000 t/yr to 2.4mn t/yr, boosting linear alkyl benzene production, and adding base oil capacity, Dangote said. The success of refined product exports to Europe, the US and Brazil — particularly jet fuel — has encouraged the company to pursue winter-grade diesel production and raise fuel quality from Euro V to Euro VI, he added.
Dangote told Argus the expansion will be financed through "very good" operating cash flow, the upcoming public listing, and "one or two strategic investors".
But securing sufficient domestic crude remains a challenge. The company has repeatedly said it is not receiving enough Nigerian crude for its existing plant, despite benefiting from a presidential programme under which state-owned NNPC sells crude to the refinery in local currency.
Dangote said the decision to proceed with expansion was encouraged by President Bola Tinubu's push to raise Nigeria's crude output to 2.4mn b/d and a new policy vision to process all domestic crude locally and export only refined products. He added that the new 750,000 b/d line will be highly flexible in the types of crude it can process.
Nigeria's 2021 petroleum law sets crude supply to domestic refineries on a "willing seller and willing buyer" basis. Dangote claims the upstream regulator and international oil companies have used this principle to bypass the spirit of the law, which he said was intended to apply to companies producing crude and refined products in Nigeria — "not a trading company outside Nigeria's shores".
A bill to amend the Petroleum Industry Act passed its first reading in Nigeria's senate earlier this month. Dangote welcomed the move and said he hopes it will close loopholes being exploited by crude exporters.
