Business
Dangote Group Signs $400m Deal to Expand Refinery Capacity
Dangote refinery expansion: Group signs $400m XCMG deal to double refinery output and strengthen petrochemicals, urea, and base oil capacity
The Dangote Group has signed a $400 million construction equipment agreement with XCMG Construction Machinery Company Limited, aiming to accelerate the expansion of the Dangote Petroleum Refinery & Petrochemicals from 650,000 barrels per day to 1.4 million barrels per day.
Also read: Dangote Refinery Dominates 62% of Nigeria’s Petrol Market
The agreement will enable the group to acquire a wide range of advanced construction equipment to support ongoing and future projects across refining, petrochemicals, agriculture, and large-scale infrastructure.
The refinery expansion is expected to be completed within three years.
“The additional equipment we are acquiring under this partnership will significantly enhance execution across our projects. With this investment, we are positioning ourselves to become the number one construction company in the world,” the group said in a statement on Monday.
The deal complements existing assets deployed for the refinery and reflects a strategic investment aimed at deepening the group’s construction footprint and advancing its ambition to build a $100 billion enterprise by 2030.
The expansion programme will also boost polypropylene production from 900,000 to 2.4 million metric tonnes per annum.
Urea capacity in Nigeria will triple from 3 million to 9 million metric tonnes per annum, alongside 3 million metric tonnes per annum capacity in Ethiopia, strengthening the group’s position as the world’s largest urea producer.
Production of Linear Alkyl Benzene will rise to 400,000 metric tonnes per annum, making the Dangote Group the largest producer in Africa and supporting the detergent and cleaning agents manufacturing sector.
Additional base oil production capacity is also part of the expansion plan.
Also read: Sanwo-Olu Reassures Investors as Lagos Drives Inclusive Economic Growth
The Dangote refinery recently reached its current nameplate capacity of 650,000 barrels per day, supplying 75 million litres of petrol daily. In January, the refinery supplied over 40 million litres of petrol per day, capturing 62 per cent of Nigeria’s market share.
President Bola Tinubu has reaffirmed the Federal Government’s commitment to rehabilitating and repositioning Nigeria’s dormant national refineries, declaring that the facilities will not be allowed to become stranded assets.
Tinubu was represented by the Permanent Secretary of the Ministry of Petroleum Resources, Mrs Patience Oyekunle, at the 20th OTL Africa Downstream Energy Week in Lagos on Monday.
The President said the government is adopting a more rigorous and commercially sustainable approach to the rehabilitation of the Port Harcourt, Warri and Kaduna refineries.
“At the same time, the government remains committed to ensuring that existing national refining assets are not allowed to become stranded investments,” the statement said.
“We are pursuing a more rigorous, commercially sustainable approach to the rehabilitation and repositioning of our refineries, supported by technical assessment, stronger partnerships, and improved operational discipline.”
The objective, according to the administration, is for Nigeria to refine more of its crude oil, create greater domestic value and become a reliable supplier of energy to Africa.
The national refineries, managed by the Nigerian National Petroleum Company Limited (NNPC), have remained largely inactive for years despite significant spending on turnaround maintenance. The NNPC has signed a memorandum of understanding with Chinese firms as part of ongoing efforts to revive the facilities.
Tinubu also noted the contribution of private refining capacity, particularly the Dangote Refinery, which has reached its 650,000 barrels-per-day nameplate capacity, in strengthening Nigeria’s prospects of becoming a net exporter of refined petroleum products.
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