DMEA: Dangote admirers and Kuwait finishes CFP

In this week’s DMEA, we take a look at the growing interest among oil companies to acquire a minority stake in Nigeria’s Dangote Refinery, while Kuwait has completed construction of its Clean Fuels Project (CFP).

Following the news last week that the Nigerian National Petroleum Corp. (NNPC) is considering acquiring a stake in the new Dangote Refinery, the facility’s developer has said that three foreign companies have also made investment overtures.

Speaking to Reuters, Devakumar Edwin, group executive director at Dangote Industries, said that his company has been approached by NNPC and Western and Middle Eastern oil and trading companies to secure crude supply agreements.

Dangote Group is constructing the 650,000 barrel per day (bpd) refinery in the Lekki free trade zone (FTZ) near Lagos at an estimated total cost of $19.5bn. Edwin noted that mechanical completion is expected this year ahead of commissioning in January 2022.

He said: “They are seeking to have 20% minority stake in Dangote refinery as part of collaboration ... so that they can sell their crude.” This could represent a combined equity investment of $3.9bn in the refinery. However, Edwin added that the company is not seeking equity shareholders, noting rather that it intends to purchase crude from the market.

Meanwhile, Kuwait’s downstream-focused KNPC this week announced that it had completed a new hydrocracking unit at the Mina Abdullah refinery, signalling the completion of work on the $15.7bn CFP.

Completion of the works is a month ahead of schedule, though the broader CFP itself has suffered numerous delays. No date has yet been given for the commissioning of the CFP, but KNPC said that work had been finalised on hydrocracking unit 114, a 70,000 bpd facility that will produce low-sulphur diesel and kerosene to meet European standards. The unit is located within the wider 454,000 bpd Mina Abdullah refinery.

The CFP comprises the upgrade and expansion of Mina Abdullah and the Mina al-Ahmadi refinery to a combined capacity of 800,000 bpd.