Peter Uzoho
In line with its plan to source feedstock from both domestic and import, Dangote Refinery has reportedly ordered two million barrels of West Texas Intermediate (WTI) Midland from the United States-based oil trader, Trafigura Group, for delivery in February.
The latest signalled the increasing competitiveness of American crude in the global market.
Bloomberg quoted traders’ familiar with the matter to have disclosed that Trafigura Group has sold two million barrels of WTI Midland to the Dangote Refinery for delivery by the end of February.
This marks the first time the refinery is buying non-Nigerian crude to keep the refinery that began production of diesel and aviation fuel recently in production.
The exponential growth in US oil supply over the past decade has reshaped the global market, extending its influence to regions like Asia.
Nigeria, whose economy heavily relies on petroleum exports, is particularly impacted by these transatlantic deliveries.
The new 650,000 barrel-a-day oil refinery commenced operations earlier this month. Initially targeting a processing rate of 350,000 barrels per day, the refinery aims to gradually escalate production towards its full capacity.
While the $20 billion Aliko Dangote-owned refinery primarily sources domestic crude through a supply agreement with the trading arm of the Nigerian National Petroleum Company Limited (NNPCL), it had received its first and third shipment of one million barrels each of Nigeria’s crude from Shell International Trading and Shipping Company Limited (STASCO).
The other four million barrels out of the six million delivered came from the NNPCL.
In addition to handling domestic feedstock, the facility is capable of processing various African crudes, along with supplies from distant sources such as the US and Saudi Arabia.
However, Dangote Group was yet to confirm the two million barrels of crude import from US’ Trafigura as of the time of filing in this report.
