Dangote Relocates Refinery To Lagos

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Aliko Dangote
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Aliko Dangote
Aliko Dangote

The Olokola Free Trade Zone in Ondo State has lost the opportunity to host the proposed Dangote Oil refinery.

It would be recalled that Africa’s wealthiest man, Aliko Dangote, signed a multi-billion dollar deal with banks to finance the building of the oil refinery last year.

The refinery, Dangote told the media would be the largest in Africa, turning Nigeria into a petroleum exporter.

Authoritative sources involved with the development of the refinery informed ionigeria.com that the refinery will now be sited at the Lekki Free Trade Zone in Lagos. Our resources also told us that the decision to move it to Lagos was final as survey work has already begun at the Lekki location.

It was also gathered that the relocation was informed by the inability of the Dangote Group to reach agreement with the communities in Ondo State who were described as very difficult.

According to one of our sources, who is actively involved in the project, “Alhaji Aliko Dangote initially settled for Ondo state because of the relative peace in the state compared to other Oil producing states, but the Olokola and Igbakoda communities became very unreasonable in their demands. If we are to accede to their demands, we may have to spend about fifty percent of the projected cost of the refinery on community relations. Since we are not government, we decided to move the project to a more business friendly environment.”

The projected 9 billion dollar refinery is planned to have a capacity of around 400,000 barrels a day and was to take off by late 2016.

Dangote, who made his fortune in cement, flour and sugar, is worth an estimated $16bn (£10bn) and has topped the Forbes list of Africa’s richest men for the past three years.

Dangote told the BBC’s Focus on Africa programme in September 2013 that the refinery would create “thousands” of jobs.
He signed a $3.3bn loan deal with local and foreign banks to build the refinery, as well as fertilizer and petrochemical plants.

The entire venture would cost $9bn, with $3bn in equity from Dangote Industries and $6bn to be raised in loan capital.

The initial loan facility was co-ordinated globally by Standard Chartered and in Nigeria by Guaranty Trust Bank, London’s Financial Times newspaper reported.

“At least for the first time in our lifetime, we’ll see Nigeria exporting petroleum products,” Dangote told Focus on Africa on the BBC World Service.

“We’ll also see Nigeria for the first time exporting fertilizer rather than using hard-earned foreign exchange to import fertilizer,” he added.

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