Nigeria’s Dangote Group has offered a 30% stake in a planned refinery in Kenya to East African nations, a senior economic adviser to Kenya’s President William Ruto said.
Dangote Group, the corporation of Africa’s richest man, Aliko Dangote, plans to build a refinery in Kenya with a processing capacity of as much as 700,000 barrels per day of crude, which is estimated to cost about $17 billion.
The refinery on Kenya’s Lamu Island would process crude for Kenya, Uganda, South Sudan, Rwanda, Burundi, and the democratic Republic of the Congo (DRC). The refinery’s planned capacity exceeds East Africa’s current refined fuel demand of roughly 450,000 bpd by about 250,000 bpd, leaving room to supply markets elsewhere on the continent.
Lamu’s natural harbor, with drafts reaching 18 meters, can accommodate fully laden Post-Panamax crude tankers carrying up to 2 million barrels, vessels too large to call at Mombasa on Kenya’s southeastern coast on the Indian Ocean.
Dangote’s plan for the refinery includes offering equity stakes to Kenya and other East African countries, David Ndii, chair of the Kenyan President’s Council of Economic Advisers, said at an economic event in Kenya’s capital city Nairobi.
Kenya’s stake of 10% could be worth $500 million, according to Ndii.
“The total for the region is about $1.5 billion,” the economic adviser said at the event, as carried by Bloomberg.
“I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop,” Ndii added.
The new giant refinery in Kenya would replicate the massive new Dangote refinery in Nigeria with a capacity of 650,000 bpd, which is capable of meeting 100% of Nigeria’s fuel demand.
Earlier this year, Dangote refinery started work on a second crude processing unit that will add another 700,000 bpd of capacity, putting the complex on track to rival the world’s largest refining site and giving billionaire owner Aliko Dangote a much larger role in global fuel markets.
By Tsvetana Paraskova for Oilprice.com
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