Dangote signs $9bn deal to build oil refinery, petrochemical complex

The Dangote Group Wednesday made history by signing of a combined $ 9.05 billion facility agreement with a consortium of local banks and international investors for the establishment of a refinery, and petrochemicals cum fertilizer complex in Nigeria.

Agreement
Under the agreement signed at a crowded ceremony in Abuja, a $ 3.3 billion medium term loan will come from local banks and international finance organizations; $2. 25 billion from the Economic Commission for Africa, ECA, and Dangote’s equity contribution of $3.50 billion.

The Central Bank of Nigeria, CBN, also made a contribution of N50 billion with interest rate of 7 per cent to be repaid in 15 years.

Chairman of the group, Alhaji Aliko Dangote, described the complex to be located at the OK-LNG Free Trade Zone, between Ogun and Ondo states, as the largest industrial complex in Nigeria’s history and that he embarked on the project as a demonstration of his confidence in the Nigerian economy.

His words: “As an investor who believes in Nigeria, knows Nigeria well and whose prosperity was made in Nigeria, we have responded to the challenge with our decision to invest $9 billion in a refinery/petrochemical and fertilizer complex to be located at the OK-LNG Free Trade Zone. This complex will be the largest industrial complex project ever in the history of our great nation.”

Dangote said the project had effectively taken off, with the award of the Engineering, Procurement and Construction, EPC, contract to Saipem of Italy for the fertilizer plant, noting that the Basic Engineering Design and optimization for the refinery had also been awarded.

When completed, the chairman said, the fertilizer plant would produce 2.75 metric tons per annum of Urea and Ammonia; while the refinery would process 400,000 barrels of crude oil per day.

We ‘ll produce high grade petrol —Dangote
He said the refinery would produce a higher grade of Premium Motor Spirit, PMS, popularly known as petrol, compared to imported ones, saying “in addition to high grade petrol, the refinery will produce: diesel, aviation fuel, household kerosene, slurry as raw material for carbon black, as well as 650,000 metric tons of polypropylene per annum. Our mission is to through industrialization, reverse the historical trend of the export of foreign exchange and jobs and replace it with foreign exchange conservation and job creation.”

Dangote added that the recent discovery and development of the shale oil and gas in “our traditional markets has further stressed the urgent need for us to diversify our economy on a fast track to avoid a reversal of the current steady improvement in all indices of economic performance.”