Company says construction fleet has grown to 6,500 equipment units as it targets 1.4 million barrels per day capacity……
Dangote Industries Limited has expanded its construction machinery fleet by another 4,000 units as work advances on the planned expansion of its Lekki refinery, taking the company’s total construction equipment to 6,500 machines.
The new equipment is part of the group’s efforts to increase the refinery’s processing capacity from its original 650,000 barrels per day to 1.4 million barrels per day, in what would significantly increase the facility’s output once the expansion is completed.
The Group Vice President, Oil and Gas and Fertiliser, Devakumar Edwin, disclosed the development on Friday while speaking to editors during a tour of the refinery in Ibeju-Lekki, Lagos.
Edwin explained that Dangote’s decision to build its own construction capacity emerged after some of the contractors initially approached for the project said they did not have the machinery or capacity required to construct the refinery’s main factory buildings.
According to him, the company initially purchased 2,563 pieces of construction equipment, eventually becoming one of the largest owners of such machinery globally.
With the latest acquisition, Edwin said Dangote has now moved into the top position in terms of the size of its construction equipment fleet.
“We bought 4,000 more pieces of equipment; we have 6,500 pieces of construction equipment. We bought 330 cranes,” he said.
The executive said the strategy was driven largely by the cost implications of relying on foreign engineering, procurement and construction contractors, who would have had to bring their own heavy machinery into Nigeria and factor the associated costs into the project.
Edwin said Dangote Group President, Aliko Dangote, therefore opted to purchase the equipment and use it to execute the project rather than incur additional expenses through overseas contractors.
He recalled that Julius Berger, after examining the refinery’s drawings, informed the company that it could not undertake the construction of the main process buildings because it lacked the required capacity.
The contractor subsequently took responsibility for 43 of roughly 127 auxiliary buildings, including canteens, transformer rooms, control rooms and fire-fighting houses, he said.
The massive equipment fleet, Edwin added, was also influenced by Nigeria’s infrastructure limitations.
He cited the construction of the Apapa sugar refinery in 1998, recalling that Nigeria had only two large cranes at the time, each capable of lifting about 150 tonnes.
For the Lekki refinery project, Dangote hired one of only two 5,000-tonne cranes available globally, while also acquiring 330 cranes for its own operations.
Edwin said the group’s investment in construction infrastructure would now provide an advantage as the refinery enters its next phase, because facilities and equipment developed during the original project can be deployed again instead of being built from scratch.
Among the infrastructure already developed are a granite quarry with a 10 million-tonne capacity, 82 concrete batching plants, 203 transit mixers, a private port, an oxygen and welding-gas plant, as well as accommodation facilities capable of housing 50,000 workers.
Refinery already exceeding design capacity
Edwin also disclosed that the refinery is currently processing more crude than its original nameplate capacity.
Although the facility was designed to process 650,000 barrels of crude oil daily, he said current operations have reached about 700,000 barrels per day.
“We have designed the refinery for 650,000, but we are now operating at 700,000. That is over 50,000 barrels per day above the design capacity,” he said.
The expansion is also being executed through Dangote’s own project company after the group rejected quotations from international contractors that would have required substantial fees for engineering and project supervision.
Edwin said contractors had quoted about 12.5 per cent of an estimated $19.5 billion capital cost, which would have translated to approximately $2.5 billion in fees.
He said Dangote considered the cost excessive and instead challenged its own project team to undertake the work.
According to Edwin, Dangote Projects Limited subsequently took responsibility for the detailed engineering, procurement and tendering process, while also purchasing project materials directly and engaging contractors to execute the work.
The executive said the approach was consistent with Dangote’s decision to develop in-house capacity rather than depend entirely on foreign contractors for the refinery project.
Refinery targets domestic supply and exports
Edwin described the Lekki facility as the world’s largest single-train petroleum refinery, saying the previous largest refinery had a capacity of about 430,000 barrels per day.
He said the plant was designed around a dual objective: meeting a substantial portion of Nigeria’s domestic fuel requirements while producing enough additional output for export markets.
Under the original plan, he said, 44 per cent of the refinery’s production would meet domestic demand, while 56 per cent would be available for export.
Edwin said about 95 per cent of the refinery’s output consists of higher-value products, including petrol, diesel and aviation fuel, while the remaining five per cent is made up largely of industrial products such as carbon black feedstock.
The refinery was also designed to produce Euro 5 and Euro 6-grade petroleum products and process different grades of African crude, as well as crude from the United States, including West Texas Intermediate.
Following the planned expansion, Edwin said Dangote’s refining capacity is expected to rise substantially, with the group also planning a 700,000-barrel-per-day refinery in Kenya.
Combined, he said, the projects would give Dangote a total refining capacity of about 2.1 million barrels per day.
