1. When the refinery gets up and running (by God's grace!) how soon will that lead to a complete end to fuel importation a month, two?

2. will the price of fuel products eg petrol, diesel, kerosene etc reduce? if so what realistic price range can nigerians expect.

3. the refinery is located in lekki how then will the refined products be transported? i'm asking this question from a transport point of view because of the usual gridlock that occurs around that lekki area. or will a pipeline be constructed from the lekki axis to the apapa tank farms.

4. also related how will the refinery be able to access it's raw crude considering the threats of sabotage, militancy and volatility of the niger-delta area?

5. apart from earning us foreign exchange and also stopping us wasting scarce dollars on importation of petroleum products what other multiplier benefits will come out from the set up of this refinery?

989900:
Jpphilips killed it already.

In addition, the refinery already has this massive underwater pipelines.
We should expect an avalanche of private refineries springing up from every corner of the country : Nigerians and 'copy cat' -- some other private refineries are already in the works already. The probability of Nigeria producing excess of 1m barrels per day in 2-3 years.

Translates to:

*Forex conservation and Forex earnings from refined products exports and fertilizer: stronger Naira.
*Increased GDP.
*Jobs.
*More FDIs.
*Power supply (it would likely take care of Lagos and environs 24*7).

Massive subsea pipelines? that's quick but it doesn't explain much, they could be offshore feed stock or Quay lines , they could be export lines, they could be loading terminal lines, it's too early to speculate what he intends to use the lines for.
I won't borrow your "copy cat" terminology, the buisness environment here is way too risky hence smart investors are always waiting for the money bags to take the first plunge, if they succeed, others can follow, it's a smart buisness strategy, the investment cost is huge, if it fails you are fvcked, guys like Dangote can absorb those shocks, so I agree, there will be new entrants if Dangote succeeds from an economics point of view, from a capitalist point of view, who likes competition?

jpphilips:


Massive subsea pipelines? that's quick but it doesn't explain much, they could be offshore feed stock or Quay lines , they could be export lines, they could be loading terminal lines, it's too early to speculate what he intends to use the lines for.
I won't borrow your "copy cat" terminology, the buisness environment here is way too risky hence smart investors are always waiting for the money bags to take the first plunge, if they succeed, others can follow, it's a smart buisness strategy, the investment cost is huge, if it fails you are fvcked, guys like Dangote can absorb those shocks, so I agree, there will be new entrants if Dangote succeeds from an economics point of view, from a capitalist point of view, who likes competition?

chrisooblog:
hello everyone ever since Aliko Dangote Africa's richest man announced his plans to build a refinery in lekki i have been keenly following his actions. his recent interview with bloomberg and the pictures posted here on nairaland showing movement of equipment for the refinery to the site have made me happy and excited about the culmination of this ambitious project.

however i have a few questions about the project and how it would impact on the nigerian economy. would highly appreciate the contributions of knowledgeable nairalanders and experts who have inside knowledge of the nigerian oil and gas industry with all it's complexities.

1. When the refinery gets up and running (by God's grace!) how soon will that lead to a complete end to fuel importation a month, two?

2. will the price of fuel products eg petrol, diesel, kerosene etc reduce? if so what realistic price range can nigerians expect.

3. the refinery is located in lekki how then will the refined products be transported? i'm asking this question from a transport point of view because of the usual gridlock that occurs around that lekki area. or will a pipeline be constructed from the lekki axis to the apapa tank farms.

4. also related how will the refinery be able to access it's raw crude considering the threats of sabotage, militancy and volatility of the niger-delta area?

5. apart from earning us foreign exchange and also stopping us wasting scarce dollars on importation of petroleum products what other multiplier benefits will come out from the set up of this refinery?

these are the few questions i have for now. please feel free to contribute your own insights or questions if i missed any out

cc 989900, tonyebarcanista, omenka, sarrki, theGoodjoe, obailala, jpphilips and any other moniker i erroneously omitted your contributions to this topic would be highly appreciated and welcome thanks

jpphilips:


Massive subsea pipelines? that's quick but it doesn't explain much, they could be offshore feed stock or Quay lines , they could be export lines, they could be loading terminal lines, it's too early to speculate what he intends to use the lines for.
I won't borrow your "copy cat" terminology, the buisness environment here is way too risky hence smart investors are always waiting for the money bags to take the first plunge, if they succeed, others can follow, it's a smart buisness strategy, the investment cost is huge, if it fails you are fvcked, guys like[b] Dangote can absorb those shocks[/b], so I agree, there will be new entrants if Dangote succeeds from an economics point of view, from a capitalist point of view, who likes competition?

jpphilips:



The Nigerian oil minister said its kicking off in 2018, in sync with Dangote's test run plans, while every maiden project comes with its unique challenges, its quite ambitious to say its a rubber stamp date of resumption, we can only hope for the best.



Dangote while he is bound by some level of domestic supply obligations his target market is the continental and global markets so don't raise your hopes yet.
On the flip side, his entry will influence some dynamics in the supply chain, Nigeria will conserve forex otherwise used to import products, Naira will strengthen and the flood gates of importation will start again.
The government may decide to ban such imports outrightly or make it difficult to access forex for that purpose, either ways, the whole monopoly arguement will start again, bla bla bla, Dangote will resist the pms 145 naira band, the marketers will strike for inclusion those are serious grey areas one can't just predict at this point. As expected, the prices are supposed to go down no doubt but in a capitalist economy, you cant be too sure.


While it is expected that a refinery of that magnitude will maintain a network of pipelines linking its surface storages nationwide, I think such projects wont commence immediately, perhaps 2-3yrs, from the little layout I ve seen of the refinery, my best guess is that he will rely more on Vessels for depot shipment through the water ways, he wouldn't want much of NUPENG wahala so I equally expect him to employ the Sino truck strategy for his tankers.



I think in the interim he may rely on Niger delta oil, however, he has stakes in several offshore oil blocks esp OML 315 and our Jdz. Crude price is low, he can afford to buy oil anywhere in the world including our production partners running out of supply contracts, feedstock isn't a problem.



I am not sure what equity we contributed to earn us the so called forex, I know he was given loads of concessions to facilitate that project, however, if those concessions were monetized, I have no clue, perhaps in the future he may be forced to accept a form of domestic supply obligation.
Like you said, government intend to conserve forex not earn at this point, we may decide to utilize the refinery derivatives to grow other sectors to earn forex.
Its a chain reaction from direct to indirect jobs, servicing contractors, supply chain effect, its gonna be the next boom.

ultron12345:

1- the refinery has a capacity of 650k barrels per day. Nigerian daily consumption can be gotten from 450k barrels. So at full capacity, 70% of output will meet nigerias demand while the rest will be for export. But we can be sure that the refinery will not start at full capacity, it might start at between 65-80% capacity to reach full capacity maybe in not more than 2 months, so we can be sure that at no matter the capacity it starts, petroleum product imports will reduce to almost zero or even zero itself. But maximum, 2 months after that, dangote will be an exporter of petroleum products.

2-considering the low price of crude, reduction in logistics costs and economies of scale the refinery will enjoy, the production costs will definitely be less which should translate to a reduced price of petroleum products. If they decide to keep margins low, petrol should in the the region of N80-N95. However, since he is the only one in the market, he can choose to sell at any price he likes, 90, 120, 145, 300, 500 or even N1000 per liter. It will then be up to investors to build their own refineries to compete with him. The exact price cannot be determined now as it will depend on wether imports are banned, government regulation and other factors. We just have to wait till then.

3-There are massive storage facilities there in the refinery which would load into tankers. The entire place has already been planned to receive the heavy traffic of tankers coming to load products. I watched an interview on tv where a lagos state govt official said that only tankers supplying to lagos would enter the main Lagos town, the rest would pass from the refinery directly into Ogun state. I am not familiar with the road network around the area so I can't particularly say where tankers would pass, but I am sure all tankers will load at the refinery storage facility and provisions are on ground to accept the traffic.

4-crude will be sourced from the Niger delta, but if they start behaving funny, facilities are already under construction for the import of crude from other countries.

gnykelly:


he can't really absolve those shock his quota of the pie is 50%. and he struggled to contribute.

the answer to question 4

is that he built a massive subsea pipeline down to the niger-delta should in case it get blown off the refinery was build not only to refine sweet crude that nigeria have in abundance but can also refine Angolan crude which is a stone throw to lagos.

jpphilips:

chrisooblog:
Happy New Year everyone please I would appreciate if you could spare some time to read this article I put the link below. Would kindly appreciate your opinion on the questions raised in the article in connection to the question I raised some years back about how the Refinery would impact on the Nigerian economy.

https://www.theafricareport.com/21854/behind-the-hype-is-dangotes-refinery-a-game-changer/amp/?__twitter_impression=true

cc 989900, tonyebarcanista, omenka, sarrki, theGoodjoe, obailala, jpphilips and any other moniker i erroneously omitted your contributions to this topic would be highly appreciated and welcome thanks

chrisooblog:
Happy New Year everyone please I would appreciate if you could spare some time to read this article I put the link below. Would kindly appreciate your opinion on the questions raised in the article in connection to the question I raised some years back about how the Refinery would impact on the Nigerian economy.

https://www.theafricareport.com/21854/behind-the-hype-is-dangotes-refinery-a-game-changer/amp/?__twitter_impression=true

cc 989900, tonyebarcanista, omenka, sarrki, theGoodjoe, obailala, jpphilips and any other moniker i erroneously omitted your contributions to this topic would be highly appreciated and welcome thanks

iyke648:
The question we should be asking is when likely the refinery will commence operation?

chrisooblog:
last I heard next year

chrisooblog:
Happy New Year everyone please I would appreciate if you could spare some time to read this article I put the link below. Would kindly appreciate your opinion on the questions raised in the article in connection to the question I raised some years back about how the Refinery would impact on the Nigerian economy.

https://www.theafricareport.com/21854/behind-the-hype-is-dangotes-refinery-a-game-changer/amp/?__twitter_impression=true

moniker i erroneously omitted your contributions to this topic would be highly appreciated and welcome thanks

chrisooblog:
last I heard next year