All eyes are currently on the Dangote refinery, currently being constructed by Africa’s richest man, Aliko Dangote (photo), to drive refining capacity increase in Africa, by 2020.

The Organization of Petroleum Exporting Countries (OPEC) in its 10th edition of its World Oil Outlook (WOO), said that the refinery, which is the first privately owned and operated refinery in Nigeria, will refine as much as 650,000 barrels of crude oil per day. According to OPEC, it will add to the production currently been seen and expected in current state-run refineries in the country.

“Of several possible refining projects, one that may materialize in the medium-term is the grassroots 650,000 b/d Dangote refinery and an associated greenfield fertilizer plant in Lagos. If built, this refinery would be Nigeria’s first privately owned and operated refinery,” OPEC said.

The group added that investments in Africa till 2021 are seen at around $20 billion with a huge part of it ascribed to two projects; the Dangote project in Nigeria and the Sonangol’s Lobito project in Angola. OPEC explained that its outlook is mainly sensitive to the progress of the large Dangote project.

“In summary, it is estimated that around 0.6 mb/d of new crude distillation capacity will be available in Africa by the end of 2021. Whether or not the large Dangote project progresses in a timely manner remains a major consideration, as it will affect how much new capacity is in fact brought on stream in the medium-term,” it stated, adding that refining capacities are on the rise in developing countries, as against the developed world, with the Asia-Pacific in the lead.

“New refining capacity continues to follow demand growth to developing regions, led by the Asia-Pacific, which is projected to add 9.5 mb/d by 2040. Capacity rationalization remains a long-term requirement, with some 2.5 mb/d of net refinery closures expected by 2040, an estimated 4 mb/d by 2025, and a further 5 mb/d are indicated as needed by 2040 if refining regions are to maintain utilization rates of at least 80%. Oil and gas are expected to supply around 53% of the global energy demand by 2040 despite the drive against fossil fuels,” it told the Cable news.

Anita Fatunji