DANGOTE ACQUIRES 4,000 EQUIPMENT FOR REFINERY EXPANSION, FLEET RISES TO 6,500
Read Time:3 Minute, 30 Second
By: Muftau Fatimo
Dangote Industries Limited has acquired an additional 4,000 pieces of construction equipment as part of efforts to expand its Lekki refinery to a processing capacity of 1.4 million barrels of crude oil per day.
The latest acquisition brings the company’s construction equipment fleet to 6,500 machines, including 330 cranes.
The Group Vice President, Oil and Gas and Fertiliser, Devakumar Edwin, disclosed this on Friday while briefing editors during a tour of the refinery in Ibeju-Lekki, Lagos.
Edwin said the company initially acquired 2,563 pieces of construction equipment after Julius Berger and other contractors indicated that they lacked the capacity to construct the refinery’s main factory buildings.
He explained that the decision to purchase the equipment instead of relying on foreign engineering, procurement and construction contractors was taken by Dangote Group President, Aliko Dangote, after the company determined that engaging overseas contractors would significantly increase project costs.
According to him, the company would have incurred additional expenses transporting contractors’ equipment into Nigeria and back, while the cost of equipment depreciation would also have been factored into the project.
Edwin recalled that Julius Berger, after reviewing the refinery’s drawings, declined to undertake the construction of the main process buildings, citing inadequate capacity.
He said the construction firm subsequently handled 43 of about 127 auxiliary buildings, including canteens, transformer rooms, control rooms and firefighting houses.
Edwin said the decision to establish Dangote’s own construction equipment fleet was also influenced by Nigeria’s infrastructure deficit.
He recalled that when the company constructed the Apapa sugar refinery in 1998, Nigeria had only two large cranes, each with a 150-tonne capacity.
For the Lekki refinery project, Dangote hired one of only two 5,000-tonne cranes in the world and purchased 330 cranes for its operations.
The Dangote executive said much of the infrastructure developed for the first phase of the refinery would also be used for the expansion, helping to reduce the cost and time required to execute the project.
He listed the existing infrastructure to include a granite quarry with a 10 million-tonne capacity, 82 concrete batching plants, 203 transit mixers, a private port, an oxygen and welding-gas plant, as well as accommodation facilities for about 50,000 workers.
Edwin also disclosed that the refinery, originally designed to process 650,000 barrels of crude oil per day, is currently operating above its nameplate capacity.
He said the facility is processing about 700,000 barrels per day, exceeding its original design capacity by more than 50,000 barrels per day.
On the decision to execute the expansion through Dangote’s own project company, Edwin said international contractors had quoted fees of about 12.5 per cent of the estimated $19.5 billion capital cost.
According to him, the proposed fees would have amounted to approximately $2.5 billion, prompting the group to reject the arrangement.
Edwin said Dangote Projects Limited subsequently undertook the detailed engineering, procurement and construction coordination for the refinery, with the company directly purchasing equipment and materials while engaging contractors for various aspects of the project.
He added that the Dangote refinery remains the world’s largest single-train petroleum refinery, with a capacity significantly higher than the previous largest facility, which had a capacity of 430,000 barrels per day.
Edwin said the refinery was originally designed to serve both domestic and export markets, with 44 per cent of its production intended to meet Nigeria’s requirements and 56 per cent earmarked for export.
He said about 95 per cent of the refinery’s output consists of high-value products, including petrol, diesel and jet fuel, while the remaining five per cent is mainly industrial products such as carbon black feedstock.
According to him, the refinery was designed to produce Euro 5 and Euro 6-grade petroleum products and process a wide range of African crude grades, as well as United States West Texas Intermediate crude.
Edwin further disclosed that Dangote’s refining capacity is expected to rise to 2.1 million barrels per day following the Lekki refinery expansion and the planned construction of a 700,000-barrel-per-day refinery in Kenya.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0