Dangote Eyes Kenya for $17bn Oil Refinery Project in East Africa

Africa’s richest man, Aliko Dangote, is considering Kenya as the preferred location for a proposed 650,000 barrels-per-day oil refinery in East Africa, after earlier plans to build it in Tanzania.

Dangote disclosed that he is leaning towards the Kenyan coastal city of Mombasa due to its deeper port advantages and stronger market potential. The proposed refinery is estimated to cost between $15 billion and $17 billion.

The project comes barely a year after Dangote’s 650,000 barrels-per-day refinery in Lagos became fully operational, currently regarded as the world’s largest single-train refinery. The planned East African facility would process crude from Uganda and other global suppliers, helping to reduce the region’s dependence on imported petroleum products.

Dangote stated that crude for the refinery could be transported by ship and need not be located near a pipeline carrying oil from Ugandan oilfields to the Tanzanian coast. He also stressed that the success of the project would depend largely on support from the Kenyan government, saying the ball is in President Ruto’s court.

The refinery proposal has sparked diplomatic tensions between Kenya and Tanzania after President Ruto announced plans for a refinery project in Tanzania without prior consultation with Tanzanian President Samia Suluhu Hassan, who reportedly expressed displeasure. Dangote may be leveraging competition between the two countries to negotiate better investment terms.

Dangote insisted Tanzania remains an option if the country can resolve the issues surrounding the proposal. He stated that governments in the region must provide policy support and protection against unfair import competition, noting that no refinery in the world can survive without such protection.

The industrialist’s confidence follows the successful completion of his $20 billion Lagos refinery, which has reached full production capacity at a time when many countries face fuel supply disruptions due to global shipping route challenges. Unlike several African nations that introduced fuel rationing, Nigeria has not experienced widespread scarcity since the Dangote refinery ramped up operations.

Dangote also revealed plans to expand his Lagos refinery’s capacity from 650,000 barrels per day to 1.4 million barrels per day within the next 30 months, which would place it among the largest refining operations globally.