Nigeria’s Dangote refinery, situated on the outskirts of Lagos, has marked a significant milestone by exporting its first jet fuel cargo to Europe, as detailed in a recent S&P Global Insights report. BP is currently transporting this initial jet fuel shipment to Rotterdam, having secured a portion of a 120,000 metric tonnes tender offered at the end of May, according to sources cited by the research firm.
The Doric Breeze vessel loaded 45,000 metric tonnes of jet fuel from Lekki on May 27, signaling BP’s inaugural cargo from the refinery, confirmed two sources based on S&P Global Commodities at Sea data. Additionally, Spanish refiner Cepsa has acquired part of the tender, with plans to deliver supplies to Europe soon.
Although BP and Cepsa have not commented on the jet fuel purchases, a representative from Dangote confirmed to S&P Global Commodity Insights that the refinery has been meeting European jet A1 standards since April, when shipments within Africa began.
This initial European delivery underscores the expanding influence of the 650,000 barrels per day Dangote refinery, which has quickly increased its operations and aims to alter traditional West African trade routes.
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Since April 8, Dangote has exported six jet fuel and kerosene cargos to destinations including Senegal, Togo, and Ghana, according to CAS data. BP is anticipated to continue supplying jet fuel to the West African market from the refinery, sources noted.
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European traders have warned that the influx of Nigerian jet fuel could exacerbate an already saturated market. Platts assessments from Commodity Insights showed that CIF Northwest European jet fuel cargoes were priced at a premium of $52 per metric tonne to the front-month ICE LSGO contract on May 29, a decrease of $3.25 per metric tonne on the day and $11.25 per metric tonne on the week.
The abundant supply has pressured the European market, shutting the arbitrage window from the Persian Gulf. The spread between the CIF NWE June and July contracts moved into a contango of minus $1.50 per metric tonne on May 29, the lowest since April 25, when the second-month contract had a $1.75 per metric tonne premium over the front-month.
Dangote’s export portfolio is expected to evolve with further ramp-ups. To date, the refinery has exported naphtha, fuel oil, and gasoil to Europe, Africa, and Asia. However, naphtha exports might reduce as the refinery gears up for gasoline production, according to a representative for Dangote.
Since April, Dangote has been exporting roughly four naphtha cargos per month to Europe, though these volumes might decrease to enhance domestic gasoline blending supplies once the fluid catalytic cracker becomes operational. The refinery anticipates its first gasoline supplies in June, slightly postponed from an earlier May projection. By the third quarter, Dangote aims to produce ultra-low sulfur diesel suitable for export to Europe.
Commodity Insights analysts predict that gasoline production from the refinery will commence no earlier than Q3, with the plant reaching steady-state utilization around 2027. At this level, Dangote is expected to produce 9% jet fuel, equivalent to approximately 45,000 barrels per day at 80% utilization. Early production could position Nigeria as a net jet fuel exporter by the end of 2024.
The Dangote refinery, part of an integrated refinery and petrochemical complex in the Lekki Free Zone near Lagos, is the world’s largest single-train facility, producing Euro-V quality petrol, diesel, jet fuel, and polypropylene. At full capacity, it will double Nigeria’s refining capacity, meeting growing fuel demands and providing significant cost and currency savings.
The 2,635-hectare refinery site near the Lekki Lagoon is strategically located for the transshipment of refined products to international markets. With an annual refining capacity of 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tonnes of jet fuel, the refinery will also produce significant quantities of polypropylene, propane, sulfur, and carbon black feed.