Dangote Refinery Aims to Double Production Capacity to 1.4M BPD Within Three Years

Dangote Refinery has detailed its strategy for increasing its operational capacity from 650,000 barrels per day (bpd) to 1.4 million bpd. The refinery intends to achieve this doubling of output through a swift expansion model that involves replicating the existing plant's design rather than undertaking a complete redesign.

During a recent visit to the Dangote Refinery, Chief Executive Officer David Bird elaborated on the expansion approach, which he characterized as "ruthless replication." This deliberate strategy involves duplicating the current refinery's structure without modifications. Bird stated that extensive re- engineering efforts in expansion projects frequently lead to significant delays and budget overruns, issues that have plagued similar endeavors by international oil corporations.

Bird explained, "Firstly, on the expansion, we’re talking here, a ruthless replication. This is a model that several other international oil companies have tried and failed. When you let the engineers go into an expansion, they often play around and it gets back to full detailed engineering. So the idea here is ruthless replication. We will not need to then tinker. We will not then need to re-engineer. So we can get straight into ordering the long lead items and commencing construction. We are firmly of the belief that we will be able to build this plant within three years."

This methodology is the foundation of management's confidence in achieving the increased capacity within a three-year timeframe. Bird highlighted two primary activities planned for concurrent execution: acquiring long-lead equipment and initiating early construction phases on the site.

In the initial phase, the refinery plans to finalize orders for all crucial long-lead equipment by the end of January. Concurrently, foundation and piling work is scheduled to commence before the month concludes, signaling the physical commencement of the expansion project.

Bird also pointed out that the land designated for the expansion has already been fully prepared, presenting a significant advantage. He mentioned that the site has been elevated by over a meter and reclaimed in advance, thereby circumventing the prolonged site preparation schedules typically associated with large industrial undertakings.

He stated, "In terms of milestones this year, two things in parallel. In the immediate term, we’ll be placing all of our long-lead procurement items which we aim to complete in the first month of 2026 and then as early as before the end of this month, starting some of our piling work (and) commencing some of our site preparation. Now, the incredible thing about this site and the vision of the President (Dangote), if you look at the landscape, you can see already that that land has been reclaimed and prepared and raised a meter and a half above where it was in the past. So, all of that land is now ready for the expansion. All that pre-investment has been done. So, none of the normal timeline that would come in a project execution. On site preparation has been done. We’re going to get straight into piling and beginning the foundations. That’ll be done this year in parallel with the procurement and then we expect to see steel coming out of the ground as early as the end of this year. Our belief is that we can bring this expansion online within 3 years."

Beyond the expansion plans, Bird addressed the refinery's intention to list a portion of its shares, describing it as a key objective. He indicated that the planned listing is designed to offer Nigerians an opportunity to acquire ownership stakes in the refinery, thereby fostering greater community involvement in the project.

According to Bird, the listing process is anticipated to commence with institutional investors before extending to retail investors, with the aim of completing the process within the current year. "First, obviously, institutional placement and then retail and we aim to do that within this year," he concluded.