The Dangote Petroleum Refinery is significantly expanding its crude oil storage capacity by building eight new tanks.
This expansion, reported by Africa Report, will add 6.29 million barrels (1 billion litres) to its existing storage, a 41.67% increase bringing the total crude storage capacity to 3.4 billion litres.
This move is driven by unreliable local crude supply from the Nigerian National Petroleum Company Limited (NNPC), forcing the refinery to rely more heavily on imported crude.
Officials of the refinery were quoted as saying that low crude supply from the Nigerian National Petroleum Company Limited “is driving import dependence.”
The refinery currently operates 20 crude storage tanks, each with a 120 million litre capacity, totaling 2.4 billion litres. With the addition of the eight new tanks, each holding 125 million litres (totaling 1 billion litres), the storage facility will be substantially larger.
This increased storage is crucial for managing the larger volumes of imported crude oil.
“Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher,” the Vice President in charge of oil and gas business at Dangote Industries, Devakumar Edwin, was quoted as having said.
“So we have started building eight additional crude tanks to hold a billion litres, over and above our original storage capacity. Four of them are nearing completion,” Edwin added.
Dangote began producing diesel and aviation fuel in January 2024, and petrol in September, with products supplied to the domestic market and exported to several countries.
Edwin described the supply of crude oil from the NNPC to the Dangote refinery as “still very low”.
This expansion of the storage facility comes amidst fluctuating crude supply dynamics in Nigeria.
While the NNPC has resumed operations at its Warri and Port Harcourt refineries, and the Nigerian Upstream Petroleum Regulatory Commission reports increased crude production, Dangote’s reliance on imports persists.
This also raises questions about the future of the naira-for-crude deal initiated by President Bola Tinubu, which aimed to supply the Dangote refinery with crude in exchange for naira.
Despite initial success in reducing fuel prices, the refinery’s focus on expanding storage for imported crude suggests a potential shift away from this arrangement.