Dangote Industries Limited has commenced preliminary works on its proposed $17bn, 700,000-barrels-per-day refinery in Kenya, marking the first major step towards what is expected to become East Africa’s largest refining project.
The company said the project has advanced beyond the planning stage, with the site already selected, soil tests ongoing and engineering and design work underway ahead of construction.
According to Reuters, the refinery, which will be located on Lamu Island off the Kenyan coast, is expected to take about three years to complete and will supply refined petroleum products to Kenya and neighbouring countries, reducing East Africa’s dependence on imported fuels.
The development comes as Bloomberg reported on Tuesday that President of the Dangote Group, Aliko Dangote, plans to build the refinery at an estimated cost of up to $17bn as part of efforts to expand his refining empire into East Africa.
Citing a spokesman for Dangote Industries Ltd., Bloomberg reported that the proposed refinery would replicate the company’s refinery in Lagos and process about 700,000 barrels of crude oil per day when completed.
The report read, “A new mega-refinery to be built at the Kenyan coast by Africa’s richest person will cost as much as $17bn, a spokesman for Dangote Industries Ltd. has confirmed.
“Billionaire Aliko Dangote personally pledged to the leaders of Kenya and Uganda that he would set up a replica of his 700,000-barrel-a-day refinery outside Lagos in East Africa. The refinery would take about five years to build.”
According to the report, Dangote personally assured the Presidents of Kenya and Uganda that he would establish the refinery in East Africa. The report recalled that Kenyan President William Ruto announced in May that Dangote would commence construction of the refinery this year.
Speaking to Reuters, Dangote Industries’ Vice President for Oil and Gas, Devakumar Edwin, said the company had made significant progress on the project. “The site has been selected, soil tests are underway, and design and engineering work has commenced. Kenya was the choice from the beginning,” he told Reuters.
According to Bloomberg, Dangote said the coastal town of Lamu in southeastern Kenya was selected as the preferred location “for commercial and technical reasons,” although he did not provide further details.
The report added that Tanzania had initially been considered as a possible location for the refinery before Kenya emerged as the preferred destination.
The project represents Dangote Group’s biggest refining investment outside Nigeria and forms part of the company’s ambition to expand refining capacity across Africa following the commencement of operations at its 650,000-barrels-per-day refinery in Lagos.
Devakumar disclosed that the refinery would be financed through a combination of internally generated cash, bonds, and proceeds from the company’s planned initial public offering.
He, however, declined to state the exact cost of the project, saying it would be comparable to that of the Lagos refinery. The Lagos refinery, built by Aliko Dangote, eventually cost more than $20bn before commencing operations in 2024.
