The Dangote Petroleum Refinery is significantly increasing its storage capacity by adding eight new crude oil tanks to its facility.

Report states that this expansion will raise its storage capacity by 6.29 million barrels, or roughly 1 billion liters, in response to unreliable local crude supplies.

The $20 billion refinery is aiming to stockpile imported crude as domestic production from the Nigerian National Petroleum Company Limited , NNPC, has become inconsistent.

NNPC’s reduced crude supply has increased Dangote’s dependence on imports.

Officials at the refinery noted that the construction of eight additional tanks will increase crude storage by 41.67%, bringing its total storage capacity to 3.4 billion liters.

Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, explained, “Importing crude from other countries instead of buying locally means our crude stockpiles must be larger.”

Four of the new tanks are nearing completion, and once fully operational, they will help accommodate an additional billion liters of crude.

Currently, the refinery operates 20 crude storage tanks, each with a capacity of 120 million liters, totaling 2.4 billion liters.

In addition, its refined product tanks hold a combined capacity of 2.34 billion liters.

Since January 2024, the refinery has been producing diesel and aviation fuel, followed by petrol in September, supplying both domestic markets and exports.

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Despite these advances, Edwin confirmed that crude oil supplies from NNPC remain “very low.” Nigeria, Africa’s largest oil producer, has faced chronic issues with underinvestment and disruptions in production, often caused by theft and pipeline vandalism.

These challenges have led to a decline in the country’s oil output, with recent reports indicating a production of 1.45 million barrels per day as of November—just under its OPEC quota of 1.5 million barrels per day.

In response to these ongoing challenges, Dangote’s decision to expand storage for imported crude could signal a gradual shift away from the naira-for-crude deal introduced by President Bola Tinubu.

Under this arrangement, the NNPC began selling crude to the Dangote refinery in naira, starting in October.

This move was seen as a way to ease the refinery’s previous months of crude shortages.

However, there are indications that Dangote is preparing for more reliance on imported crude as local supplies remain inconsistent.

Alhaji Aliko Dangote, the president of Dangote Group, previously accused international oil companies of attempting to sabotage the refinery by withholding crude oil.

In July 2023, the Federal Executive Council approved the sale of crude to local refineries in naira, with Dangote’s refinery as the pilot.

Since then, Dangote has reported that the arrangement has led to reduced petroleum prices in Nigeria.

The Dangote refinery’s production is steadily increasing, particularly in the petrol sector, where its products are becoming increasingly popular among Nigerian vehicle owners.

Crediblenewsng.com