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Nigerian billionaire Aliko Dangote's refinery has secured at least 16 million barrels of Nigerian crude for October delivery, three days before it asks the public for $1.55 billion.
Four industry sources told Reuters the October purchases are in line with recent months and well above last year's average. They comprise monthly allocations from the Nigerian National Petroleum Company and additional volumes bought through tender. The final figure could rise.
The purchases work out at roughly 520,000 barrels a day across the month, against a plant that processes up to 700,000 barrels a day. The shortfall is covered by imported grades. Dangote did not respond to a request for comment.
Feedstock is the investors' question
The refinery's own framing, cited in the trade report, is that feedstock supply is in focus for investors. The order book for the initial public offering opens on Monday, offering 4.1 billion shares at N525 to raise about N2.15 trillion, with proceeds earmarked for expansion toward 1.4 million barrels a day.
Doubling capacity doubles the crude requirement, in a market the report describes as tightening because the war involving Iran has cut competing Middle East supplies.
Domestic intake has doubled
Dangote took 565,000 barrels a day of Nigerian crude in August, according to Kpler vessel-tracking data, against an average of 280,000 barrels a day last year.
NNPC will supply eight Nigerian cargoes in October plus one cargo of US WTI Midland, according to a person familiar with the matter. That would match the monthly record for NNPC supplies, equalling April, May and August. The refinery bought a second WTI Midland cargo through a spot tender from another supplier, two traders said. Further Nigerian cargoes make up the balance.
It has also bought from Libya and Guyana, and continues to purchase various grades internationally to meet requirements.
What it means for Nigeria
Higher domestic refining keeps more crude in the country rather than exporting it, which is the stated policy rationale for the plant. It also means Dangote absorbs a growing share of Nigeria's available crude at a moment when global supply is under pressure.
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