Africa has abundant crude oil resources but is highly dependent on imported refined oil products. The large-scale equipment cooperation will significantly increase Nigeria's domestic refining capacity, adjust the regional energy trade pattern, and broaden the overseas development space of domestic heavy industry.

Nigeria has abundant oil resources, but has long relied on imported fuel to meet market demand, and the shortcomings of local refining continue to compress industry profits. Local leading enterprise Dangote Group has launched a refinery expansion plan and selected China Xugong Group to provide a complete set of engineering equipment, with a total amount of 400 million US dollars. After doubling the production capacity of the project, it is expected to change the current situation of fuel supply and demand in Africa, but the long construction period, raw material supply and other difficulties still lay uncertain factors for expansion.  

Simultaneous promotion of production capacity and capital

The $400 million equipment order will fully guarantee the expansion project of the Lekimi Refinery, increasing its current daily production capacity from 650000 barrels to 1.4 million barrels within three years. After completion, it will benchmark against large-scale refining projects in India and become a world-class single refinery. The refinery will be put into operation in 2024, with a regular production capacity of 650000 barrels per day and a peak testing capacity of 700000 barrels. The finished oil products are exported to many places in Africa, Europe, America, the Middle East. The company is synchronously advancing its IPO preparations, planning to raise $1 billion through private equity, with an overall valuation of $39.1 billion. At present, the intended subscription amount has exceeded $2 billion. The first phase of the project took more than ten years to complete, and there were multiple issues with the construction period, funds, and raw materials, which posed a risk of implementation for the second phase expansion.  

Significant gap in local refining

Nigeria ranks first in oil production in Africa and has been exporting crude oil for a long time before repurchasing refined oil products, resulting in a serious imbalance in its industrial structure. Global fuel demand continues to rise, and the region urgently needs large refining bases to reduce external imports. The industry as a whole is developing towards large-scale intensification, and high-yield refineries have the dual advantage of cost supply. The Dangote expansion project perfectly matches the demand for independent energy development in Africa.  

Double directional expansion of industrial markets

Dangote Group aims to expand and improve the entire local energy industry chain, reduce dependence on refined oil products, create a core hub for fuel supply in Africa, and leverage the capital market to amplify industrial value.Keywords: XCMG、 African energy industry

For XCMG Group, this cooperation is a crucial step in deepening the development of energy infrastructure in Africa. By relying on equipment cost-effectiveness and delivery advantages to seize the market, gradually replacing similar Western products, continuously increasing the market share of domestic construction machinery in African energy projects, and deepening industrial cooperation between China and Africa.Editor/Min Jing