Aliko Dangote, Africa’s richest person whose Dangote Group operates the biggest refinery on the continent, on Wednesday broke ground for a planned fuel storage site in Namibia, which will serve as a fuel distribution hub in southern Africa.
“We want to heavily invest so that most of the landlocked countries will be able to access petroleum products at a cheaper price,” Dangote said at a groundbreaking event on Wednesday.
The project, expected to cost $2.5 billion, includes a fuel depot outside the main port of Walvis Bay in Namibia and a 1,700-kilometer (1,056-mile) pipeline to bring fuels to Botswana and South Africa, and potentially to other countries.
The fuel storage-plus-pipeline project is expected to “strengthen Namibia’s energy security and advance regional trade and industrial development across southern Africa,” Dangote said, as carried by Bloomberg.
The Nigerian refinery plans to ship growing volumes of fuel to African countries, which are currently dependent on imports and are concerned about supplies and their energy security in the wake of the Iran war and the massive disruption of fuel exports from the Middle East.
Earlier this year, Dangote said he would help finance a new fuel pipeline between Ethiopia and Djibouti, which is expected to cost about $660 million. The project will consist of a pipeline connecting the port of Damerjog in Djibouti to a distribution facility in Dewele, Ethiopia, and a storage hub.
Dangote Group plans an expansion of fuel distribution networks in Africa after the refinery of the same name of 700,000-bpd capacity began operations two years ago.
Dangote plans another major refinery in Kenya to serve the eastern African markets.
Meanwhile, the initial public offering (IPO) of a minority stake in Dangote Petroleum Refinery in Nigeria closed last week, with investors from 120 countries, including all 54 African countries, applying to buy shares.
The IPO could raise as much as $2.1 billion if the company exercises its greenshoe option, which is now almost a given, considering the record-high interest in the float. Proceeds are expected to be invested in a $14-billion plan to double the refinery’s crude processing capacity from nearly 700,000 barrels per day (bpd) now to 1.4 million bpd by 2029.
By Charles Kennedy for Oilprice.com
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