Nigerian Regulator to Grant Full Operating License to $20 Billion Dangote Refinery

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has announced that it will soon issue a full operating license to the $20 billion, 650,000 barrels per day Dangote Petroleum Refinery in Abuja, Nigeria. The authority has already awarded a pre-commissioning license to the refinery, which is expected to receive the full license in the near future.

NMDPRA Chief Executive Farouk Ahmed stated that the authority has issued valid licenses to three refineries in the country so far, and the Dangote Refinery will be the fourth. "The Dangote refinery will soon receive its full commission and operating licence," Ahmed said during a consultation forum organized by the NMDPRA.

The Dangote Refinery, inaugurated by former President Muhammadu Buhari in May 2023, has already started releasing Automotive Gas Oil (diesel) to the domestic market. However, it has not yet released Premium Motor Spirit (petrol). The refinery received six million barrels of crude oil at its two Single Point Moorings (SPMs) located 25 kilometers from the shore and an additional one million barrels of Bonny light crude from the Nigeria National Petroleum Company (NNPC Ltd).

Why this matters: The commissioning of the Dangote Refinery is a significant milestone for Nigeria's oil and gas industry. As the largest refinery in Africa, it has the potential to significantly reduce Nigeria's dependence on imported petroleum products and boost the country's economy through increased domestic production and job creation.

In addition to the Dangote Refinery, the NMDPRA has licensed 1,199 facilities in the downstream sector, with more than 176 operators holding gas import permits, 130 depots having valid licenses, and 69 holding valid coastal vessel licenses. The authority has also licensed 9,464 retail outlets as of April 30, 2024.

The NMDPRA organized the consultation forum to discuss the Midstream and Petroleum Host Community Development Trust Regulations, which aim to address the impact of emissions and effluence on host communities. The forum sought to gather input from participants on which facilities should be covered under the regulations and the criteria for inclusion.

Farouk Ahmed emphasized the importance of industry players implementing regulations that affect host communities, stating that "the inclusion of host communities in the Petroleum Industry Act (PIA) is seen as a tool to address insecurity in oil-producing regions." The NMDPRA's efforts to engage participants and ensure the proper implementation of regulations demonstrate the authority's commitment to fostering a sustainable and inclusive oil and gas industry in Nigeria.

Key Takeaways

• NMDPRA to issue full operating license to Dangote Refinery, the largest in Africa.
• Dangote Refinery has already started releasing diesel to the domestic market.
• NMDPRA has licensed 1,199 facilities in the downstream sector and 9,464 retail outlets.
• NMDPRA organized a forum to discuss Midstream and Petroleum Host Community Development Trust Regulations.
• NMDPRA aims to address insecurity in oil-producing regions through host community inclusion.