Dangote Industries Limited has acquired 4,000 additional construction machines to begin expanding its Lekki refinery in Lagos, targeting a processing capacity of 1.4 million barrels per day. The group's Vice President for Oil, Gas and Fertiliser, Devakumar Edwin, made the announcement on Friday during a media tour of the Dangote Petroleum Refinery in Ibeju-Lekki, Lagos.
Expansion Fleet and Equipment Details
Edwin said the new purchase brings the company's total construction fleet to 6,500 machines, including 330 cranes. This follows an earlier acquisition of 2,563 pieces of equipment when the company first entered the construction equipment business after Julius Berger and other contractors said they could not build the refinery's main processing facilities.
"We ended up buying 2,563 pieces of equipment. We became the second largest company in the world in terms of construction equipment. Today, we are the largest because of the expansion," Edwin said, as reported by Punch. Julius Berger later went on to construct 43 of roughly 127 support buildings on the site, covering facilities such as canteens, transformer rooms, control rooms and fire-fighting houses.
Rejection of Foreign Contractors
The decision to build in-house went beyond equipment. Edwin said international engineering, procurement and construction firms had quoted fees of about 12.5% of an estimated $19.5 billion capital cost for the refinery's expansion, a figure that would have amounted to approximately $2.5 billion.
"I said, it's madness to go and give two and a half billion dollars to a contractor as just a fee for designing and supervising," Edwin stated. Instead, Dangote Projects Limited took charge of the detailed engineering, procurement and contractor management for the entire project. Edwin said the approach meant every component, down to nuts and bolts, was purchased directly rather than through a foreign intermediary. He also noted that bringing in foreign contractors would have required shipping their equipment into and out of Nigeria, with depreciation costs passed on to Dangote.
Refinery Operating Above Design Capacity
Edwin said the refinery, originally built to process 650,000 barrels of crude per day, is currently running beyond that figure. "We have designed the refinery for 650,000, but we are now operating at 700,000. That is over 50,000 barrels per day above the design capacity," he said.
Beyond Lekki, Dangote also plans to build a 700,000-barrel-per-day refinery in Kenya. Edwin said the combined capacity of both projects would give the group a total refining output of 2.1 million barrels per day. The expansion is expected to significantly boost Nigeria's domestic refining capacity and reduce reliance on imported petroleum products.
