Dangote awarded PMC and EPCM contracts to EIL
The privately-owned Dangote Group selected the Indian state-owned engineering company Engineers India Ltd (EIL) to provide engineering, procurement and construction management (EPCM) services for the $9 billion refinery and petrochemical complex to be built at Olokola in Nigeria.
This EPCM contract comes on the top of the project management consultancy (PMC) contract signed previously for the sale project.
This Dangote Group belongs to Mr Aliko Dangote, a Nigerian billionaire ranked as the richest man in Africa and among the top 25 in the world.
With interests in the cement, food and beverage industry and more recently in agriculture, Dangote represents about 30% of the Nigeria stock exchange and expand its operations in the whole Africa sub-Sahara region.
Although Nigeria is Africa largest crude oil producer and exporter, it is also the largest importer of refined products.
This unbalanced situation is not only due to the expansion of the domestic consumption but also to the regular decline of the productivity in the Nigerian refineries still in operations.
Currently the four local refineries, located in Port Harcourt, Kaduna and Warri, are running at about 20% only of their total capacity of 445,000 barrels per day (b/d).
While the population in Nigeria is expected to reach 200 million inhabitants in 2020, Dangote realized that this country could not continue to rely on 80% import of refined products.
In this context Dangote decided to build a new refinery and petrochemical complex in Olokola.
Dangote and EIL selected UOP Honeywell technology
With the project budgeted to require $9 billion capital expenditure, Dangote brought on the table $3 billion in equities from his own Group and another $3.3 billion by loans from a pool of 12 banks.
The remaining part of the financing should be completed by 2016.
In the meantime, Dangote is moving ahead to build this refinery designed with a capacity of 400,000 b/d.
With the support of EIL appointed as PMC from the front end engineering and design (FEED) stage, Dangote selected UOP-Honeywell from USA to licence its refining technology.
This Dangote Refinery project should include:
- Crude distillation unit
- Single train residue fluid catalytic cracker
- Diesel hydrotreating unit
- CCR unit
- Offsite and Utilities
- Integrated power plant
Then the petrochemical complex will cover the:
- Alkylation unit
- Polypropylene units with 600,000 tonnes per year (t/y) capacity.
This polypropylene plant will produce the basic feedstock to produce bags and materials to pack fertilizer and all kinds of agro-products.
To be located in the Olokola Free Trade Zone (FTZ), the Dangote refinery and petrochemical complex will also include a single point mooring to facilitate crude oil and refined products handling.
With the EPCM contract being awarded to the Indian EIL, the Olokola Dangote Refinery and Petrochemical project is expected to start execution in 2014 in targeting first shipments in 2017.