Aliko Dangote has stated that he is planning to site a huge $17 billion 650,000-barrel-a-day oil refinery in Kenya, East Africa, after questions over a previous push to build the facility in Tanzania. “I’m leaning more towards Mombasa because Mombasa has a much larger, deeper port,” he told Financial Times in an interview.
He compared Kenya’s port to Tanga, the proposed Tanzanian site for the refinery to process oil from Uganda, and the open market. Dangote estimated it would cost $15 billion to $17 billion to build. Tanzanian President Samia Suluhu Hassan last week complained angrily to her Kenyan counterpart William Ruto that she had not been consulted over the earlier plan to build it on her country’s coastline, which was announced in her absence last month at an infrastructure summit.
“Kenyans consume more. It’s a bigger economy,” he said, adding that crude oil for the refinery could be transported by ship and need not be located near a pipeline that will carry oil nearly 1,500 kilometres from Ugandan oilfields to the Tanzanian coast at Tanga.
“The ball is in the hands of President Ruto,” he said. “Whatever President Ruto says is what I’ll do,” the billionaire added. For the East African refinery to get off the ground, Dangote said, he would need Ruto to offer land, some East African finance, and, most important, protection from what he called dumping of cheap fuel from the likes of Russia or India.
“There is no refinery in the world that can survive without that protection,” he said. “If we have an agreement, we can start this year,” he explained. He told the FT he could still build the refinery in Tanzania “if they are able to sort themselves out”. Dangote’s Nigerian refinery was built over 10 years entirely in-house, defying critics who doubted he could ever get it up and running after decades in which the Nigerian state had tried and failed to build meaningful refining capacity.
“Dangote feels vindicated, not only by succeeding technically in getting the refinery to work, but also succeeding commercially,” one Dangote executive said, speaking on condition of anonymity. The plant, the biggest so-called single-train refinery in the world at 650,000 barrels a day, has hit full capacity just when other countries are struggling to access petrol, diesel, and jet fuel because most ships cannot transit the Strait of Hormuz.
Unlike several other African countries, such as Mauritius, Ethiopia, and Zimbabwe, which have had to ration fuel or dilute it, Nigeria has seen no lines at petrol stations and has not had to take emergency measures.