With a limited ability to build reserves through the deadweight tonnage of tanker fleets through the Very Large Crude Carriers (VLCCs), the federal government can take advantage of the $2.4 billion crude storage facility. liters from the Dangote refinery to serve as the country’s strategic reserve.
Strategic petroleum reserves are stocks of crude oil held by countries to be released in the event of a supply disruption. The United States Strategic Petroleum Reserve (SPR) is the largest in the world with a capacity of 727 million barrels.
Nigeria’s oil reserves of less than 40 billion barrels are mostly untapped and sold locally, weakening its ability to do good business compared to countries with strategic stocks.
According to the Executive Director, Strategy Capital Projects and Portfolio Development, Dangote Group, Devakumar Edwin, the refinery, which has a storage capacity of 4.742 billion liters, will serve as a strategic reserve for the country.
A breakdown of storage capacity showed that 2.4 billion liters would be allocated to crude while the rest would be used as storage for refined fuels.
Edwin, who led Information and Culture Minister Lai Mohammed around Dangote Oil Refinery, Petrochemicals and Dangote Fertilizer Plant, said 75% of hydraulic tests of the refinery, as well as 70% of the electrical cable connections, have been completed in preparation for the completion of the refinery in the fourth quarter of this year.
Edwin said 75% of the refinery’s products (gasoline, kerosene, aviation fuel and diesel) will be shipped by sea, through which products could be transported to Calabar, Warri, Lagos and Port Harcourt.
Information and Culture Minister Lai Mohammed said commissioning of Dangote Oil Refinery, Petrochemicals and Dangote Fertilizer Plant will help ensure energy and food security in the country.
The Minister said: “We must not fail to appreciate the fact that it is not only that we will be self-sufficient in terms of food security and energy security, but that the quality of our refined products and our fertilizers will be world-class”.
Mohammed said the refinery will ensure the availability of the highest quality Euro V petroleum products, the fertilizer plant produces granulated urea, which is of the highest quality and does not become sticky and cause no loss of value for farmers.
He said the 650,000 barrels per day Dangote refinery, which is expected to come online this year, will be a game-changer in terms of job creation, contribution to GDP and currency conservation.
“Based on what we’ve heard here today about the 650,000 barrels per day Dangote refinery, that would be a game-changer once it comes online in terms of job creation. The refinery currently employs 35,000 people every day.
“There will be a huge added value that will contribute to the increase in GDP, the conservation of currencies because there will be no more imports of petroleum products, the generation of currencies through the export of finished products, the availability of petroleum products thus ending the queues for gasoline, and the attraction of foreign capital investment,” the minister said.
He said the Dangote fertilizer plant, which was commissioned by President Muhammadu Buhari last month, has made Nigeria the top producer of urea in Africa.
“With the commissioning of the Dangote fertilizer plant, Nigeria is now self-sufficient in the production of urea. Nigeria is today the leading producer of urea in Africa. The Dangote Fertilizer factory already exports to the United States, India, Brazil, Mexico and Argentina.
We were lucky enough to see a ship loaded with urea for export to Argentina during our visit today,” Mohammed said.
He said that currently the fertilizer plant provides 1,500 direct jobs and 15,000 indirect jobs.
The Minister, who praised Dangote Group Chairman, Aliko Dangote for boosting investor confidence in Nigeria, said the Federal Government will continue to create an enabling environment for business to thrive.
“Under this administration, the Presidential Business Environment Council (PEBEC) has implemented over 150 reforms, pushing Nigeria up 39 places on the World Bank’s Doing Business Index since 2016. Mr. President also signed the Companies and Related Matters Act 2020 (CAMA 2020) – Nigeria’s most important commercial legislation for three decades.
“The result of this favorable business environment is the birth of new businesses such as the $2.5 billion Dangote Fertilizer Plant which will produce three million metric tons of urea each year; the 650,000 barrel per day oil refinery due to open later this year; Lekki Deep Sea Port, one of the most modern seaports in West Africa; BUA’s three million metric ton cement plant; the 5,000 barrels per day modular refinery in Ibigwe, Imo State, and three other modular refineries to be commissioned by May 2023 in Edo and Bayelsa States, to name a few -unes,” he said.