DMEA: Dangote launch date optimism

This week, DMEA looks at increased confidence that Nigeria can launch its flagship refining project this year, while an Aramco affiliate moves towards IPO.

Nigeria’s Dangote Group this week reiterated its intention to begin operations at its greenfield, 650,000 barrel per day (bpd) refinery at Lekki outside Lagos.

Reiterating expectations voiced by the company’s CEO earlier this year that refining would begin during Q3, group executive for strategy, capital projects and portfolio development Devakumar Edwin said it would be operational by Q4, noting that the facility would achieve completion by the end of the year too, ahead of the previous schedule of early 2023.

During a site tour, Edwin said: “75% hydraulic testing ... as well as 70% of electrical cable fitting have been completed preparatory to the completion of the refinery in the fourth quarter of this year.” He added that the $19bn facility will have a storage capacity of 4.7bn litres.

Edwin noted that around 40% of the refinery’s output would be available for export, with the majority to be dedicated to the local market.

Meanwhile, Saudi Aramco Base Oil Co. (Luberef) is reported to be planning to launch an initial public offering (IPO) of shares on the local Tadawul All Share Index (TASI), the Riyadh stock exchange.

Sources told Bloomberg this week that the company has appointed a local subsidiary of HSBC Holdings and SNB Capital to advise on the offering, which is seen raising in excess of $1bn.

Luberef was formed in 1976 as a 70:30 JV between Aramco and US super-major ExxonMobil, before the American giant sold its 30% stake to Jadwa Industrial Investment Co. in 2007. The sources said that the plan is for the Jadwa share to be listed.

According to Aramco, “Luberef produces high-quality base oil at an optimised grade mix from its two production facilities that are strategically located in Jeddah and Yanbu’.”