Dangote Boosts Crude Storage Capacity by 6.29 Million Barrels to Address Import Dependence

The Dangote Petroleum Refinery is expanding its crude storage capacity by an additional 6.29 million barrels, or 1 billion litres, to mitigate challenges posed by unreliable local crude oil supplies.

The company has commenced the construction of eight new storage tanks, with four nearing completion.

The $20 billion refinery, which began producing diesel and aviation fuel in January 2024 and petrol in September of the same year, is ramping up capacity to ensure consistent operations and meet both domestic and international demand.

The expansion will increase the refinery’s crude storage capacity by 41.67 percent, from 2.4 billion litres to 3.4 billion litres.

Vice President of Oil and Gas Business at Dangote Industries, Devakumar Edwin, confirmed the development and attributed the situation to the shortage of local crude oil.

“Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher,” Edwin stated.

“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,” he added.

Currently, the refinery operates 20 crude storage tanks, each with a capacity of 120 million litres.

Its refined product tanks have a total capacity of 2.34 billion litres, enabling the company to supply the domestic market and export refined products to multiple countries.

Despite being Africa’s largest oil producer, Nigeria has faced crude oil production challenges due to rising theft, pipeline vandalism, and underinvestment.

These issues have resulted in periodic production outages and constrained crude supply to domestic refiners.

The Nigerian National Petroleum Company Limited (NNPC), which is responsible for supplying crude to the Dangote refinery, has struggled to meet expectations.

Edwin described the supply from NNPC as “still very low,” prompting the refinery to rely increasingly on imported crude.

The decision to expand crude storage capacity also reflects the impact of the naira-for-crude initiative introduced by President Bola Tinubu.

In response to the refinery’s growing reliance on imported crude, industry analysts have raised concerns about Nigeria’s ability to meet local refining needs.

The Nigerian Upstream Petroleum Regulatory Commission recently reported crude oil production of 1.45 million barrels per day in November, slightly below the 1.5 million barrels per day quota set by OPEC.