The Dangote refinery in Nigeria increases gasoil exports to the West African market

According to traders and shipping data, Nigeria’s recently constructed Dangote oil refinery is expanding its gasoil exports to West Africa, displacing refiners in Europe.

Built on the outskirts of Lagos by Africa’s richest man, Aliko Dangote, the $20 billion refinery is generating gasoil of a lower grade than anticipated while it waits for the restart of units required to create cleaner fuels. As a result, the company is looking for clients in nearby markets.

According to data from analytics firm Kpler, the refinery’s gasoil exports reached about 100,000 barrels per day (bpd) in May, almost surpassing April’s figures. A single shipment was sent to Spain, although the majority of the exports were sent to other West African nations.

Although overall oil product exports, which include fuel oil, naphtha, and jet fuel, were relatively high at 225,000 bpd, preliminary June gasoil volumes have dropped significantly, according to the statistics.

The refinery “shifted the balances in West Africa,” which had an impact on European markets, according to a source that deals in European distillates.

According to Kpler statistics, gasoil exports from the EU and the UK to West Africa dropped to a four-year low of 29,000 bpd in May, while Russian exports to the region dropped to an eight-month low of 87,000 bpd.

Dangote has been supplying high-sulfur gasoline to the Nigerian market as well, but it is embroiled in a conflict with regional fuel vendors over who is supplying the more polluting fuel.

A 50 parts per million (ppm) sulfur level was required by Nigeria’s oil law, passed in 2021, in accordance with the sub-regional ECOWAS regulations set in 2020. To give local refineries and importers more time to comply with the new criteria, the regulator did, however, let the sale of gasoil containing more than 200 parts per million to be marketed locally from the start of the year until June.

Cargoes from the Dangote refinery have found a home in areas with lax motor fuel requirements while European nations, notably major hubs Belgium and the Netherlands, tighten regulations on high-sulfur gas oil exports.

According to a trader with access to the specifications, the refinery has been producing and exporting gasoline with a concentration of 800-1,300 ppm, which is far higher than the permitted 200 ppm.

The business did, however, claim that it was on track to shortly reach 10 ppm gasoil.
Within two weeks, the equipment would be completed and commissioned, according to Davakumar Edwin, an official at the Dangote Refinery. Dangote stated last week in a statement that they are progressively aiming to fulfill the new criteria.