Oil & Gas

The Dangote Petroleum Refinery in Lekki, Lagos, has secured its first shipment of one million barrels of Algeria’s high-quality Saharan Blend crude oil, according to a report by Argus. This move comes as Nigeria's local refineries continue to face crude shortages, despite the country increasing its crude production to 1.5 million barrels per day in January, meeting its OPEC quota for the first time in three years.

The shipment, expected to arrive between March 15 and 20, marks the first time the refinery will process Algerian crude, which is highly sought after due to its low sulfur content and premium refining yields. Saharan Blend, with an API gravity of 45.3 and just 0.1% sulfur content, is typically exported to Europe. However, weaker demand in Europe due to seasonal refinery maintenance may have prompted sellers to seek alternative markets like Nigeria.

The refinery purchased the shipment from trading firm Glencore last week, although the price remains undisclosed. Data from Vortexa shows that nearly 420,000 barrels per day of crude have been delivered to the Dangote refinery so far this year, with Nigerian crude making up 87% of all arrivals. The decision to buy Saharan Blend highlights Dangote's strategy to diversify its crude supply sources and optimize refining efficiency.

Beyond Algeria, the Dangote refinery is exploring long-term crude supply agreements with international suppliers, including the United States and Brazil. Aliko Dangote, the refinery’s founder, previously stated that importing crude from other African nations would become necessary if local supply remained inconsistent. Despite these challenges, Africa’s largest refinery, which began processing crude in January last year, continues to expand its production of diesel, naphtha, and jet fuel.