By Rareview Energydesk
Dangote Industries Limited has acquired an additional 4,000 pieces of construction equipment as work advances to expand its Lekki refinery from its current 700,000 barrels per day capacity to 1.4 million barrels per day.
The acquisition brings Dangote Industries’ construction fleet to about 6,500 machines, including 330 cranes, as the company prepares for the next phase of what is already one of Africa’s biggest industrial projects.
Group Vice President, Oil and Gas and Fertiliser, Devakumar Edwin, disclosed this during a briefing with editors following a tour of the refinery in Ibeju-Lekki, Lagos.
Edwin said Dangote initially bought 2,563 pieces of construction equipment after contractors, including Julius Berger, indicated that they lacked the capacity to construct some of the refinery’s main factory buildings.
“We ended up buying 2,563 pieces of equipment. We became the second largest company in the world in terms of construction equipment. Today, we are the largest because of the expansion,” Edwin said.
“We have bought 4,000 more pieces of equipment; we have 6,500 pieces of construction equipment. We bought 330 cranes.”
The decision, he explained, was driven partly by the cost of bringing foreign contractors and their equipment into Nigeria.
“If I bring in a foreign contractor, I’ll have to ship in all his equipment, and I’ll have to ship back all his equipment, and those guys will also try to depreciate their equipment by adding it to our cost,” Edwin said.
“By the end of the day, we end up paying a lot of money. So my president said, very well, let’s go and buy all the construction equipment.”
That approach has turned what began as a response to Nigeria’s construction-capacity constraints into a major in-house engineering and construction capability.
Edwin recalled that Julius Berger, after reviewing the refinery’s drawings, declined to undertake construction of the main process buildings.
“They said, sorry, we cannot do any of your factory buildings. We don’t have the capacity,” he said.
The contractor subsequently handled 43 of about 127 auxiliary buildings, including canteens, transformer rooms, control rooms and firefighting houses.
The scale of equipment deployment reflects the infrastructure challenges confronting large industrial projects in Nigeria. Edwin recalled that when Dangote built its Apapa sugar refinery in 1998, Nigeria had only two large cranes, each with a 150-tonne lifting capacity.
For the Lekki refinery, Dangote hired one of only two 5,000-tonne cranes in the world and purchased hundreds of additional cranes and other heavy equipment.
“When we are operating in a country with an infrastructure deficit, it takes a lot of time to plan, a lot of money to invest in all these things that industries do not require,” he said.
The company now intends to reuse much of the infrastructure developed for the original refinery as it expands, a strategy expected to reduce both construction time and costs.
Edwin listed an existing 10-million-tonne-capacity granite quarry, 82 concrete batching plants, 203 transit mixers, a private port, an oxygen and welding-gas plant and accommodation facilities for up to 50,000 workers among the infrastructure already available at the site.
The refinery itself has also moved beyond its original design capacity.
Designed for 650,000 barrels per day, the facility is now operating at about 700,000 bpd. Dangote confirmed the 700,000-bpd operating capacity in June following performance tests by its process licensors.
“We have designed the refinery for 650,000, but we are now operating at 700,000. That is over 50,000 barrels per day above the design capacity,” Edwin said.
The planned expansion is part of a reported $14.3 billion programme that will double the refinery’s capacity to 1.4 million bpd, with completion targeted around 2029. Basic engineering has been completed and most detailed engineering work is also understood to be substantially advanced.
Edwin said Dangote also rejected the option of paying international engineering, procurement and construction contractors large fees to supervise the expansion.
According to him, foreign contractors had quoted fees of about 12.5 per cent of an estimated $19.5 billion capital cost.
“I said, it’s madness to go and give two and a half billion dollars to a contractor as just a fee for designing and supervising,” he said.
He recalled that Dangote responded by pointing to a plaque on his desk carrying the words: “Nothing is impossible.”
“That is how we took up the challenge,” Edwin said.
He said Dangote Projects Limited subsequently handled the detailed engineering, procurement and tendering process and engaged contractors for construction.
Beyond its sheer size, the refinery was conceived as both an import-substitution project and an export platform. Edwin said 44 per cent of its output was originally intended to meet Nigeria’s domestic requirements, with the remaining 56 per cent targeted at export markets.
The facility is designed to produce high-value products, including petrol, diesel and aviation fuel, with Edwin saying about 95 per cent of production falls into those categories.
“95 per cent of our production is high value, either petrol or diesel or jet fuel,” he said. “Only five per cent is lower, and even that five per cent is actually an industrial product, carbon black feedstock.”
Dangote says the refinery produces Euro V-standard fuels and is capable of processing a wide range of crude grades. Its current official capacity is 700,000 bpd, with an expansion pathway to 1.4 million bpd.
The expansion comes at a consequential moment for Nigeria’s petroleum industry. The refinery has already altered the country’s downstream market by adding a large domestic source of refined petroleum products, while the planned expansion could significantly increase Nigeria’s capacity to export refined products.
But the next phase will also expose the project to a different challenge: crude supply.
The company’s IPO documents have identified the need for continuous and reliable crude availability as an important requirement for operating the expanded facility efficiently.
That issue could become as important as the construction itself. Building another 700,000 bpd of refining capacity is one challenge; securing enough suitable crude, at commercially viable terms and with dependable logistics, to keep that capacity running is another. For now, however, Dangote is preparing for the physical challenge with the same strategy that helped build the original plant — acquiring the machinery, infrastructure and technical capacity it believes it needs rather than waiting for Nigeria’s wider industrial ecosystem to provide them. The 6,500-machine fleet is an extraordinary symbol of that approach.