The fertiliser plant will be cited in Edo State.
Dangote Group on Wednesday signed an agreement with a consortium of 12 Nigerian and international banks for a $3.3 billion (about N528 billion) loan to facilitate the construction of a $9 billion oil refinery, petrochemical, and fertiliser complex in Nigeria.
The deal is part of a $6.75billion debt financing arrangement to augment the equity contribution in the project by the group, which also has interests ranging from cement, to basic food processing, to oil and gas sectors of the economy.
The consortium of banks include Standard Chartered, Guaranty Trust Bank, Access Bank, Zenith Bank Plc, First Bank Nigeria Plc, Ecobank International, Fidelity Bank Plc, United Bank for Africa, Standard Bank, Diamond Bank First City Monument Bank and FirstRand Bank.
Standard Chartered Bank was the Global Coordinator of the facility, with Guaranty Trust Bank PLC as the Nigerian Coordinator.
At the agreement signing ceremony, Mr. Dangote announced that contracts for the construction of the refinery and petrochemical plant have been awarded to US-based conglomerate, UOP, a subsidiary of Honeywell International, a Fortune 500 company that specializes in consumer products, engineering services and aerospace systems.
Similarly, India Engineers Limited, an Indian government-owned company credited with the setting up of refineries in India, has been appointed the project manager for the refinery and petrochemical plant, while the contract for the fertilizer plant had been awarded to oil and gas contractor, Saipem, a subsidiary of Italy’s Eni.
Dangote said that the fertilizer plant, to be sited in Edo State, was designed with a capacity to produce 2.75million tons per annum (MTPA) of ammonia and urea, while the refinery, with overall capacity of 400,000 barrels per day (bpd), and the petrochemical plant, with a capacity to produce about 600,000MTPA of polypropylene, would be located at OKNLG Free Trade Zone bordering Ogun and Ondo states.
The Refining and Petrochemical plants, he stated, would be the largest of its kind in Africa, with installed production capacity Euro 5 quality standard as against the Euro 3 currently being supplied in the Nigerian market.
On completion, he said the refinery would supply over 7.684 million MTPA of refined petroleum products, otherwise called premium motor spirit (PMS); about 5.30 million MTPA of automotive gas oil (AGO) or diesel; about 3.740million MTPA of Jet Fuel/Kerosene; about 0.213million MTPA of liquefied petroleum gas (LPG), and about 0.625million MTPA of slurry/fuel oil.
“This is our contribution to the present government’s economic transformation agenda,” Mr. Dangote said. “It forms part of our expansion initiatives of the Group, which size has in the last five years increased ten-fold to a market capitalization of $22 billion.”
Reputed to account for over 30 per cent of the total market capitalization of the Nigerian Stock Exchange (NSE), Dangote Group has undertaken a massive expansion programme in the last five years aimed at repositioning it as Nigeria’s largest employer of labour.
“It is on record that this administration has helped create and maintain the enabling environment that has encouraged us to invest over $6 billion in the Nigeria cement manufacturing industry in the last seven years.
“We are happy to inform you that we are not resting on our oars as we through this letter want to inform you of our recent decision to make possible what could,” he said.
Apart from helping remove the bottlenecks in the fuel importation and supply chain by cutting the massive fuel imports, the refinery, when completed, would help create over 25,000 jobs.
Elated at the development, Vice President Namadi Sambo, who was a special guest at the ceremony, applauded the Dangote Group for supporting the economic agenda of President Goodluck Jonathan’s administration, saying the government has created the enabling environment for businesses to thrive in the country. He commended the Group for gingering the economy.
The Minister of Petroleum Resources, Deziani Alison-Madueke, said the Dangote refinery is a confirmation that Nigeria’s economy was working; pointing out that it would open the flood gate of more opportunities.
The Central Bank Nigeria Governor, Lamido Sanusi, said the refinery deal was a big one in the history of Nigeria, which also shows that Nigerian banks were healthier, while attributing the development to the ongoing CBN’s banking reforms, adding that it was time for Nigerian government to discourage importation and encourage local manufacturing.