Nigerian billionaire Aliko Dangote pitches Cameroon fuel terminal to reach landlocked Central Africa

Aliko Dangote's industrial group has proposed building a petroleum products storage terminal in Cameroon, a move that would carry Africa's largest refinery into the Central African fuel trade and open a route to the landlocked markets of Chad and the Central African Republic.

Devakumar Edwin, the group's vice president for oil, gas and fertiliser, put the proposal to Prime Minister Joseph Dion Ngute on Tuesday. Business in Cameroon first reported the details. No agreement was announced after the meeting, and the project remains at the discussion stage.

The group has disclosed almost nothing about the specifics. It has given no location, storage capacity, investment value or construction timeline, and has not said whether the terminal would be wholly owned, developed alongside the Cameroonian government or structured as a public-private partnership. The proposal does contemplate a pipeline network for moving refined products inland, which would cut logistics costs and reduce reliance on road haulage.

The bottleneck behind the plan

The refinery at Lekki, outside Lagos, carries a nameplate capacity of 650,000 barrels a day and ran at a record 660,000 barrels a day across May and June. Dangote announced in October that he intends to expand it to 1.4 million barrels a day, which would make it the largest refinery in the world. The output has already redrawn regional trade, with West African imports of clean products from outside the region falling almost 25 percent year on year in the second quarter.

Moving the fuel is the constraint rather than making it. Eleven West African countries have no refinery at all, storage capacity across the continent is thin, and inland distribution depends heavily on road tankers, which lengthens transit times and raises costs. David Bird, chief executive of the refinery, told an industry conference in June that the group is accelerating work on pipelines, marine terminals and storage depots, and is targeting refining costs roughly 30 percent below the global average.

A second regional hub

Cameroon would be the second such hub under negotiation. Dangote has proposed a 1.6 million barrel gasoline and diesel storage facility at Walvis Bay in Namibia, put at about $143 million, or N$2.4 billion, alongside a 1,838-kilometre pipeline running to Bulawayo. He discussed that route with President Emmerson Mnangagwa in Harare in November. Bird has described the southwestern corridor, from Namibia through Botswana into Zimbabwe and Zambia and potentially into South Africa and the Democratic Republic of Congo, as the most developed of the group's pipeline options.

Namibian opposition parties warned that the scheme could damage local trucking firms and downstream operators. The same questions are likely to attach to the Cameroonian proposal.

Cameroon is already a buyer. It was one of five African markets, with Côte d'Ivoire, Tanzania, Ghana and Togo, that took a combined 456,000 tonnes of refined products from the refinery earlier this year. The group also runs cement operations in Douala, so it is not a newcomer to the country.

Competing with the state

The proposal arrives in a market the state dominates and is spending heavily to expand. The National Petroleum Storage Company manages Cameroon's fuel storage, its nationwide distribution network and its strategic reserves. It is developing a terminal at the port city of Kribi with 230,000 cubic metres of capacity for petrol, diesel and kerosene, plus facilities for 40,000 tonnes of liquefied petroleum gas. That project alone would nearly double the country's existing liquid fuel storage of about 245,500 cubic metres.

A second terminal is under development by CSTAR Tank Farm Project Management, a consortium owned by Ariana Energy, Tradex and the National Hydrocarbons Corporation, offering between 250,000 and 300,000 cubic metres for diesel, petrol, aviation fuel, kerosene and heavy fuel oil at an estimated 168 billion CFA francs, about 256 million euros. Together the two schemes would add at least 480,000 cubic metres to Cameroon's downstream capacity.

Whether a Dangote terminal would complement those investments or compete with them for port infrastructure, financing, pipeline access and product volumes remains unresolved.

Dangote's position

Bloomberg's billionaires index valued Dangote at $36.7 billion in June, keeping him the wealthiest person in Africa. Forbes put him at $28.5 billion on its March list of African billionaires. He has said publicly that both figures understate what he owns, arguing that the refinery alone is worth more than $40 billion before any of his other assets are counted.

Cameroon has not indicated when it will respond, or whether it would require the terminal to sit within the country's pricing framework, taxation rules and strategic reserve obligations.