Nigeria to restore refining capacities with private loans
On September 4th 2013, the Nigeria private Dangote Group (Dangote) sealed a financial agreement with 12 banks for a $3.3 billion loan to build a greenfield refinery and petrochemical complex in Olokola in the south of Nigeria.
With $8 billion capital expenditure, this $3.3 billion loan will contribute to the $6.75 debt financing required to complete the equity directly provided by the Dangote Group.
Ranked as the richest man in Africa and among the top 25 in the world with $20 billion fortune, the billionaire Aliko Dangote controls about 30% of the Nigerian Stock Exchange with most of his interest concentrated on the cement and food industry in Nigeria and sub-Sahara Africa.
Two of these refineries are located in Port Harcourt, one in Kaduna and one in Warri.
All together these refineries are only running at 20% of their nominal output.
With a population to reach 200 million inhabitants before 2020, Nigeria cannot afford to continue to rely on 80% import to cover its domestic needs in transportation fuels and fertilizer to boost the agriculture at the convenient levels.
The international Standard Chartered Bank and the local Guaranty Trust Bank coordinated the pool of the national and foreign banks to support the $3.3 loan.
UOP, EIL, Saipem won Dangote Olokola first contracts
The refining technology has been licenced from the US-based UOP/Honeywell.
The Indian state-owned engineering services company India Engineers Limited (IEL) has been appointed to provide project management consultancy (PMC) from the design stage to the execution phase.
In March 2013, Saipem was awarded the contract for the front end engineering and design (FEED) and the engineering, procurement and construction (EPC) contract for the fertilizer plant with the support of the Indian services from Tata Projects for the project management consultancy (PMC)
– 400,000 b/d of crude oil
– 600,000 tonnes per year (t/y) of Polypropylene