Dangote Refinery Not Importing Fuel, Says MD
The Managing Director of the Dangote Petroleum Refinery, David Bird, has said that the $20bn facility is not importing finished petroleum products, explaining that the refinery operates a merchant refining model that does not rely solely on crude oil.
According to Bird, what some individuals called fuel was intermediate feedstock. Bird made the clarification while addressing newsmen at the refinery in Lekki, Lagos, on Wednesday.
During a technical presentation on the refinery’s operations, he stressed that the Dangote refinery was deliberately designed to operate differently from conventional refineries in crude-producing countries.
According to him, unlike refineries in countries such as Saudi Arabia, Kuwait, or the United Arab Emirates, which are typically located at the end of crude oil pipelines and depend largely on domestic crude supply, the Dangote refinery does not simply sit on a pipeline processing just Nigerian crude.
“Nigeria is a crude-producing country, but Dangote Refinery does not sit on the end of a pipeline just processing the country’s crude oil only. Dangote is a merchant refinery,” Bird said.
He explained that a merchant refinery is one that sources its crude oils and other feedstocks from the global market, usually delivered by sea, allowing it to process a wide variety of crude and intermediate components rather than relying on a single crude stream.
Bird said this model, which is common in major refining hubs such as Europe, Singapore, and Taiwan, was intentionally replicated in Nigeria to maximise value and ensure operational flexibility.
To illustrate this structure, he pointed out that the refinery has a significantly larger tank farm than processing units, noting that storage capacity is central to merchant refining because it allows different crudes and feedstocks to be segregated, blended, and processed in varying combinations.
“You bring in different crudes. You need to segregate those crudes, and then you mix them to make certain crude cocktails which your plant can process,” he explained.
Bird added that each crude produces different proportions of products such as LPG, naphtha, kerosene, and diesel, and that processing varying crude blends can lead to underutilisation of some units if additional feedstocks are not introduced.
Because refining is a capital-intensive business, he stressed that maximising utilisation across all units is critical. “It’s all about utilisation. Just like an aeroplane or a hotel, once you build it, you want to drive occupancy. The same principle applies to refining,” he said.
The Dangote refinery MD noted that the main value in refining does not lie in crude distillation alone, which simply separates products based on what nature provides, but in conversion and processing units that upgrade low-value materials into high-value products.
He explained that the refinery converts heavy residues from crude distillation — materials that would otherwise be low-value — into high-value white products using advanced conversion units such as the Residue Fluidised Catalytic Cracker.
According to him, when certain crudes produce lower volumes of residue, the refinery can import residue feedstocks to keep those conversion units fully loaded. “This is a real moneymaker for us. We crack low-value residue and convert it into high-value white product,” Bird disclosed.