Jet fuel is exported by a Dangote refinery to Europe - Report

The Dangote refinery in Nigeria has achieved a significant milestone by shipping its inaugural load of jet fuel to Europe.

This illustrates the enormous facility’s quick operational expansion and marks a critical milestone in the global energy industry.

BP is now using the Doric Breeze to transport 45,000 metric tons of jet fuel from the Dangote refinery to Rotterdam, according to a report released on Friday by S&P Global Commodity Insights.

With this shipment, the refinery makes its market debut in Europe after winning a substantial 120,000 mt tender.

S&P Global Commodity Insights provides a comprehensive perspective of the world’s energy and commodities markets, empowering our clients to make informed decisions and build enduring value.

According to PUNCH Online, “BP cargo” is the consignment of jet fuel that British Petroleum (BP) has purchased and is presently moving.

BP has taken the lead in a ground-breaking move that might change the dynamics of the global energy market by delivering 45,000 metric tons of jet fuel to Rotterdam. This is a critical step for the new 650,000 b/d complex.

The cargo, which was loaded on May 27 from Lekki, demonstrates the refinery’s quick production ramp-up and adherence to European jet A1 requirements, paving the way for possible changes in the trading patterns of West Africa.

“Two sources confirmed that the Doric Breeze ship marked the inaugural BP cargo, loading 45,000 mt of supply from Lekki May 27, according to S&P Global Commodities at Sea data.

“Cepsa also secured part of the tender, with the Spanish refiner expected to deliver supply to the continent imminently, traders said.

“Neither of the companies were available for comments on purchases of jet fuel from the refinery, while a representative from Dangote previously confirmed to S&P Global Commodity Insights that the refinery has complied with European jet A1 standards since the product first started being shipped within Africa in April.

“The inaugural European shipment demonstrates the growing reach of products from the 650,000 b/d Dangote refinery as it has rapidly ramped up operations and aims to shake up established West African trade flows.

“Dangote has exported six jet fuel/kerosene cargoes starting April 8, with all material delivered to Senegal, Togo or Ghana, according to CAS data. BP is also expected to continue supplying jet fuel to the West African market with product from the refinery,” sources said.

European merchants warned that as Nigerian supplies enters an already oversupplied market, new jet fuel flows could worsen the current downturn.

CIF Northwest European jet fuel cargoes brought a premium of $52/mt to the front-month ICE LSGO contract on May 29, down $3.25/mt on the day and $11.25/mt on the week, according to Platts evaluations from Commodity Insights.

The European market was being burdened by an excess of supply, which effectively closed the opportunity for arbitrage from the Persian Gulf.

The difference between the June and July contracts for CIF NWE enters a contango on May 29 of negative $1.50/mt. According to Commodity Insights data, Platts rated the second-month contract at a $1.75/mt premium to the front-month counterpart on April 25, showing quick market weakness and a contango structure that had previously been assessed lower.

Export shift –
Due to the refiner’s aggressive schedule for more unit ramp-ups, its export portfolio may shortly undergo a change.

As of May 20, a Dangote spokesperson informed Commodity Insights that the company has sold gasoline, fuel oil, and naphtha to markets in Europe, Africa, and Asia. However, the company may soon stop exporting naphtha in order to prepare for the manufacturing of gasoline.

Since April, Dangote has been observed shipping four shipments of naphtha per month to Europe; however, once the plant’s fluid catalytic cracker is operational, the volume may shortly be reduced to increase domestic supplies for gasoline blending.

“Dangote is now projecting its first gasoline supplies to begin in June, a spokesperson said May 20, revised from a previous May deadline. Meanwhile, the refiner has aimed to produce ultra low sulfur diesel eligible for export to Europe by the third quarter,” a representative for Dangote said in April.

Analysts at Commodity Insights have maintained their estimates that the refinery will start producing gasoline no early than Q3, and that the plant will reach steady-state usage by 2027.

Dangote is predicted to produce 9% jet fuel in a steady state, or around 45,000 barrels per day at 80% utilization. However, early refinery supplies might turn Nigeria into a net exporter of jet fuel as early as the fourth quarter of 2024.

Aliko Dangote, the chairman of the Dangote Group, stated on Tuesday that, barring a last-minute change in schedule, the $20 billion Dangote Oil Refinery would be listed on the Nigerian Stock Exchange by December 2024.

Commodities at Sea (CAS), according to PUNCH Online, is a high-frequency market intelligence service that offers visibility into fleet analytics, trading operations, and commodity supply.

For waterborne, internationally traded commodities transported on larger tankers or bulkers, CAS provides information on cargo volumes and trip details. Additionally, it offers thorough statistics on fleet data and trade flow trends.

(Additional S&P Global Reports)