Get ready to witness a game-changing move in the global energy landscape! The Dangote Refinery is set to become the world’s largest refinery by 2028, expanding its capacity to a staggering 1.4 million barrels per day (b/d). But here’s where it gets even more intriguing: this isn’t just about scaling up—it’s about reshaping Africa’s energy future. Let’s dive into the details.
Nigeria’s flagship 650,000 b/d Dangote Refinery has officially confirmed its ambitious plan to nearly double its capacity within the next few years. Chairman Aliko Dangote revealed that the expansion will involve adding a second 750,000 b/d processing line at the Lagos site, mirroring the success of the existing plant, which kicked off commercial operations last year. What’s fascinating is how the lessons learned from the initial construction and the existing infrastructure will streamline the process, making the second phase faster and more efficient. And this is the part most people miss: the original design always included this expansion, but the company wisely waited to assess performance before taking the leap.
Once completed, this refinery will surpass India’s Reliance Jamnagar refinery (1.2mn b/d) as the largest in the world. Dangote proudly announced on October 26, “This will be the biggest refinery the world has ever seen.” He also hinted at a strategic partnership, mentioning that an agreement with a refinery technology licensor was signed earlier that day, though the firm’s name remains undisclosed. For context, the current plant relies heavily on technology licensed from Honeywell UOP, a U.S. engineering giant.
But here’s the controversial part: While the expansion is fueled by soaring regional demand—particularly from West and East Africa, with countries like Ghana and Angola showing keen interest—there’s a looming challenge. Dangote admits the current capacity isn’t enough to meet demand, yet securing sufficient domestic crude remains a hurdle. Despite benefiting from a presidential program that allows state-owned NNPC to sell crude to the refinery in local currency, the company claims it’s still not receiving enough Nigerian crude. This raises a thought-provoking question: Is Nigeria’s petroleum law truly serving its purpose, or are loopholes being exploited by crude exporters?
Dangote’s decision to expand was bolstered by President Bola Tinubu’s vision to ramp up Nigeria’s crude output to 2.4mn b/d and a new policy to process all domestic crude locally, exporting only refined products. The new 750,000 b/d line will be highly flexible, capable of processing various crude types. However, Nigeria’s 2021 petroleum law, which operates on a ‘willing seller, willing buyer’ basis, has been criticized by Dangote for being misused by upstream regulators and international oil companies. He argues the law was meant for companies producing both crude and refined products in Nigeria, not for traders operating outside the country.
A glimmer of hope emerged earlier this month when a bill to amend the Petroleum Industry Act passed its first reading in Nigeria’s senate. Dangote welcomed this move, expressing optimism that it will close the loopholes. But will it be enough? Only time will tell.
Financially, the expansion will be backed by robust operating cash flow, the upcoming public listing on the Nigerian stock exchange in 2026, and strategic investors. Speaking of the listing, here’s another intriguing detail: While initially offering a 10% stake to the public, Dangote hinted that up to 30% could be made available to meet domestic demand. With projected revenues of $55 billion annually and a diversification push into petrochemicals, the company aims to reassure investors.
The expansion isn’t just about refining crude; it’s about transforming the entire value chain. Polypropylene output will surge from 900,000 tons/yr to 2.4mn tons/yr, linear alkyl benzene production will be boosted, and base oil capacity will be added. The success of refined product exports to Europe, the U.S., and Brazil—especially jet fuel—has encouraged the company to aim higher, targeting winter-grade diesel production and upgrading fuel quality from Euro V to Euro VI.
As we wrap up, here’s a question to ponder: With Africa’s energy demands skyrocketing and global refineries racing to meet them, will Dangote’s bold move solidify Nigeria’s position as a regional powerhouse, or will supply chain challenges and regulatory hurdles slow its momentum? Share your thoughts in the comments—we’d love to hear your take!
