Dangote Refinery, a Game Changer

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In the next three months, production activities will commence in the multi billion-dollar Dangote Refinery and Petrochemical complex situated in the Ibeju-Lekki axis of Lagos State, with the train one of the fertiliser plant expected to come on stream. But even as that historical day approaches, the project is already adding value to the lives of Nigerians through skills acquisition, jobs and wealth creations. Bamidele Famoofo writes that the project on completion will change the dynamics of the nation’s economy

Though Dangote Refinery and Petrochemical project, where petroleum products, gas and fertilizers are planned to be produced at commercial quantities is still being developed, its impact on its immediate environment and by extension, the nation in general, gives hope for a better tomorrow for Nigerians.

For instance, no fewer than 120 companies, which operate in the country are on contract to provide goods and services worth 368 million Euros (about N148billion) to both the refinery and petrochemical projects for the period the various works going on simultaneously in the complex would be completed.

In terms of employment generation, about 37,500 people, mostly Nigerians, are engaged in the various construction works going on in the complex. They have temporary jobs through contractors for a period not less than four years when the projects within the complex will be completed to earn a living wage.

Group Executive Director, Strategy, Portfolio Development and Capital Projects, Dangote Industries Limited, Devakumar Edwin, said through its corporate social responsibility programmes, about 250 youths from the communities around the refinery have been trained as artisans and given direct employment to work and earn income to fend for their families. “These are youths who do not have the requisite education and skills that can qualify them for jobs in the refinery and the other segments of the business which we selected and trained to acquire relevant skills in partnerships with the Lagos State government and Siemens to reduce unemployment in the state and also to engage them productively to contribute to the growth of the Nigerian economy,” Edwin told a delegation from the Nigerian Union of Journalists and Nigerian Institute of Public Relations during their recent tour of the complex.

In addition, Edwin disclosed that 900 engineers would be trained in foreign educational institutions for employment in the complex. He explained that the overseas training has commenced in earnest with batches one and two having completed their training, with the third batch proceeding to India for a similar exercise. “Classroom training only lasts for one month while on the job training takes one year. They are to work in real time with experts in the industry everyday for that duration of 12 months.” he added.

Currently, the company is employing 3,580 Nigerian personnel on site, which excludes employment created by the various contractors and sub contractors at the construction site.

Apart from job creation and capacity development, host communities have more things to benefit from the CSR programmes of Dangote. Edwin disclosed that free medical services would be provided in collaboration with the local government while schools, hospitals or community health centres would be constructed too. Access to micro credit and merit scholarship are part of the things to be provided for the host community. Development of youth entrepreneurs through trainings is also one of the key focuses of the CSR programme of the company in its immediate operating environment.

The refinery complex which includes a refinery, petrochemical plant, a fertilizer plant and a subsea pipeline project, is the largest in the world. The refinery’s daily production capacity would be 150 per cent of the current total demand of petroleum products in Nigeria, with the excess exported to other countries.

With a 650,000 barrels per day capacity and 838 KTPA Polypropylene plant, the refinery segment of the business on completion will become the largest single-train petroleum refinery in the world while the 3million tonnes per annum capacity Urea fertilizer Plant will emerge world’s second largest. The gas project has the largest subsea pipeline infrastructure more than any country in the world as it boasts of 1,100km to handle 3.8 million SCF gas per day. World scales gas treatment stations are expected to emerge after the completion of the project.

The Dangote fertiliser project which is estimated to gulp $2billion is the largest granulated Urea fertiliser complex to emerge in the entire fertiliser industry history in the world, with its 3million tonnes per annum capacity. The fertiliser complex, which sited on 500 hectares of land has the capacity to expand as it is only occupying a small fraction of the allotted portion. Natural gas being the main raw material for the plant is being expected to arrive anytime in May 2019 for the fully completed train one plant to commence operation.

Saipem Italy is the engineering procurement, procurement and construction contractor for the project while Tata Consulting Engineers, India, is the project management consultants for the fertiliser project. Meanwhile, Chevron has the contract to supply natural gas for production activities in the plant.

The management of the complex is confident that the fertiliser business will deliver good profit to the company and its shareholders as it is projected that population growth and the need for food production will jack up the consumption of Urea fertiliser beginning from 2020 when production of the production would have commenced in earnest.

The current consumption of Urea estimated at a dismal 700,000 tonnes per annum by Nigerian farmers, said to be due to very poor hectare usage is believed to be the cause of poor product yield, which threatens food security in the country.

By 2020, Nigerian population is projected to increase to about 207million, which would lead to increased food production. Statistics revealed that that around five million tonnes of fertilisers are required per year in Nigeria in the next 5-7 years bifurcated into 3.5million tons of Urea and 1.5million tons of NPK while current production levels in Nigeria are at 1.6million tons by 2019.

Beyond fertiliser and oil, Dangote is setting up large oxygen and acetylene plant in Nigeria to produce wielding gases since the current production capacity of this product is not sufficient to meet the demand in the wielding industry.

The Dangote group has also seized the opportunity presented by the refinery and petrochemical project to build expertise in construction works, growing a construction company that will be formidable enough to take on huge construction contracts in the country.

“We have bought over 750 equipment to enhance the local capacity for site works since even Julius Berger,Dantata & Sawoe, Hi-Tech and the likes are unable to handle even small portions of our construction requirement of heavy earth moving equipment, bulldozers, excavators, bobcats, compactors and front end loaders,” Dangote hinted.

Additional capacities built for construction are in the mechanical construction and stone quarry segments. The company, according to information made available by its COO, has bought 300 cranes to build up equipment installation capacity as he said the current capacity in Nigeria is extremely poor. Dangote equally boasted to have built the world’s largest granite quarry to supply coarse aggregate, stone column material, stone base, stone dust and material for break water. The quarry has a capacity of 10million tonnes per annum production.

The refinery and petrochemical project is estimated to gulp $18billion with the refinery alone accounting for $12billion, which represents about 67 per cent of total cost. Additional benefits of the project is that the gas from the pipeline system could generate 12,000MW electricity for the nation while direct employment to be created by the project is estimated at 4,000 on completion, about 145,000 people will get indirect jobs.

Besides, foreign exchange savings for Nigeria is projected to be $7.5 billion while additional forex income for the country is put at $5.5 billion. The targeted completion date for the refinery is October 2019.