Dangote Oil Refinery, located in Lagos, is planning to purchase millions of barrels of US crude over the next year as it increases its processing rates.
The refinery, built by Aliko Dangote, Africa's richest man, has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for a period of 12 months starting in July, as indicated in a document seen by Bloomberg.
This move by the refinery, which is situated in Africa's largest producer nation, underscores its significant influence on global crude and fuel trading. Once fully operational, it will be the largest fuel-making facility in Africa.
The tender is set to close at 3 p.m. on May 21.
The tender reflects the challenge faced by Nigerian crudes in competing against American supply, according to a trader of West African barrels.
As of now, there has been no immediate response to a request for comment from an official at Dangote.
The refinery is a 650,000 barrels per day (BPD) integrated refinery project under construction in the Lekki Free Zone near Lagos, Nigeria. It is expected to be Africa's biggest oil refinery and the world's largest single-train facility.
In March, the Nigerian government expressed concerns about the possibility of Port Harcourt, Kaduna, Warri, Dangote, and BUA refineries not receiving enough crude oil locally for the production of petroleum products once they are fully operational.
The Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, highlighted that the refineries and modular refineries in the country might face a shortage of crude oil unless there is an increase in production in the sector.
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