Report: Dangote refinery buys 1m barrels of crude from Algeria

The Dangote Petroleum Refinery has received one million barrels of crude oil from Algeria.

According to a report by Augus Media, sources said the refinery bought the crude cargo from Glencore trading firm in February.

The sources also told the publication that the cargo would be delivered from March 15 to March 20.

However, the report said the deal was not directly confirmed by either party and the price remains unknown.

Augus Media also said none of the tankers which have loaded in Algeria in February have flagged Africa as their destination, suggesting the cargo will load in March.

According to the report, a trader noted that Saharan blend’s quality is suitable for the Dangote refinery and that it is competitively priced compared to Nigerian grades.

“Nearly 420,000 b/d of crude was delivered to Lekki for Dangote so far this year, with about 82pc of that made up of light sweet grades, Vortexa data show. Nigerian crude accounted for 87pc of all arrivals,” Augus Media said.

“The March-loading trade cycle for Saharan Blend was slow to kick off due to sluggish demand in Europe because of seasonal refinery maintenance and ample light crude supply.

“This may have encouraged buyers in Europe to hold off on purchases of Saharan Blend in anticipation of weaker price differentials, prompting sellers to look to alternative outlets.”

The report added that Saharan blend prices have dropped by $1 per barrel in February when March-loading cargoes were trading, and now stand at a 20¢/bl discount to the north.

In February, Dangote refinery was expected to receive up to 12 million barrels of crude oil from the United States.

The development came amid the refinery’s efforts to ramp up production as the 650,000 bpd facility received about 24 million barrels of Nigerian supply in October and November last year.

On February 10, Edwin Devakumar, vice-president of Dangote Industries Limited (DIL), said the refinery could begin operating at full capacity in 30 days.

Also, Aliko Dangote, chairman of DIL, had assured Nigerians that his refinery has over N600 billion worth of premium motor spirit (PMS) in storage that can sufficiently meet Nigeria’s needs.