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Dangote Oil Refinery can now process winter diesel, executive says

The Dangote Oil Refinery has the capacity to produce winter diesel for the European market, an executive said on Tuesday, a further indication of its potential to disrupt the global refining market.

The refinery built by Nigerian billionaire Aliko Dangote on the outskirts of Lagos is expected to hit production of 550,000 bpd this year, equivalent to 85% of its 650,000-bbl capacity.

It began operations in January with output of products including naphtha and jet fuel and started processing petrol in September.

"We will have surplus production for export in all our products - gasoline, diesel, jet fuel, carbon black feed stock and polypropylene," said Edwin Devakumar, head of the refinery.

Devakumar confirmed reports that the refinery would soon export its first gasoline, an estimated 200,000 tonnes targeting West African and Caribbean markets.

"The products for most of the market will be loaded as vessels arrive. Euro V gasoline will be shipped from the end of the year," he said.

The refinery, which is obliged by the government to sell locally to reduce demand for U.S. dollars, has struggled to distribute petrol in Nigeria, largely due to pricing. Last month, Aliko Dangote said the refinery had a stockpile of 500 MM liters (l) of petrol.

After state-oil firm NNPC began selling petrol at market prices last month, it relinquished its role as the sole buyer of the refinery's output, allowing local traders to import fuel after becoming embroiled in a pricing dispute with the refinery.

However, the Independent Petroleum Marketers Association of Nigeria, a fuel trading group with more than 150,000 outlets across the country, said on Monday it had reached an agreement to buy directly from the refinery at "cheaper" prices, while NNPC said it had stopped importing petrol.

Petrol currently sells at around 1,090 naira ($0.6537) on average in Lagos and around 1,200 naira in the capital Abuja and other major cities.

The refinery has been exporting the bulk of its other products including naphtha, diesel and aviation fuel, with Ghana among those expressing an interest in buying from the refinery.

($1 = 1,667.3100 naira)

 

 

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