CEM REPORT, ENERGY | The much anticipated 650,000 barrel-per-day Dangote Refinery is expected to commence a test run of the facility in December.
Recent report reveals that the Nigerian National Petroleum Company Limited (NNPCL) has concluded a deal to supply six million barrels of crude oil in December, to be used in test runs of the Dangote Refinery.
The report by Reuters details that NNPCL would supply six cargoes, or 200,000 bpd, in December as part of a one-year deal, adding that volumes in future months would be supplied “based on mutual agreement and availability”. Another source states that about 4-5 cargoes, or at least 130,000 bpd, were planned.
The details of the deal between NNPCL and Dangote Group are still yet to be published, however, a Dangote Group official, who did not wish to be named, said “some of the agreements have confidentiality clauses” without elaborating when asked about the NNPCL supply deal.
It is no news that the NNPCL has a 20 per cent stake in the refinery, however, it is believed that the supply deal is riding on a Sales And Purchase Agreement (SPA) between the NNPCL and Dangote Refinery. The formalisation of the agreement is scheduled to take place in the coming weeks, Thisday reports.
The deal will be on a purely commercial basis and without any recourse to discount, or selling at rock-bottom prices.
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Recall that prior to the inauguration of the refinery, NNPCL had stated that it would supply 300,000 barrels of crude oil to the facility. In September however, Dangote Group Executive Director, Devakumar Edwin, came out to say that the NNPCL would not be able to supply the refinery until November.
The refinery began the commissioning process in May this year after running years behind schedule for $19 billion, above initial estimates of $12-14 billion.
Commissioning includes testing the different units that make products from gasoline to diesel and making sure they respond to the control panels.
