…Dangote Refinery processes about 700,000 barrels of crude oil daily with plans to expand its capacity, a development that would significantly increase demand for maritime transportation.
-Felix Douglas
Industry stakeholders of Oil Trade Logistics (OTL) Africa Downstream Energy Week 2026 in Lagos discuss the impact of the Dangote Refinery on West Africa Petroleum shipping, rising tanker freight costs, indigenous vessel financing, port efficiency and maritime security.
Shipping executives and maritime stakeholders have highlighted the growing influence of the Dangote Petroleum Refinery on petroleum product flows across West Africa, while calling for improved port efficiency, affordable vessel financing and stronger maritime security to reduce logistics costs.
The stakeholders made the observations during a Panel Session XIII Tanker Shipping & Logistics Forum on petroleum shipping, freight markets, maritime security and logistics.
The discussion examined changes in regional petroleum product movements following the commencement of operations at the Dangote Refinery, the impact of global conflicts on tanker freight rates, and the role of security and efficient evacuation systems in strengthening Nigeria’s petroleum value chain.
Managing Director of Riverlake, Bello Tukur, who presented an overview of the global tanker market, said geopolitical tensions, particularly the Russia-Ukraine war and disruptions around the Strait of Hormuz, had significantly affected shipping routes, vessel availability and freight costs.
According to him, sanctions and changes in global oil trade have forced vessels to travel longer distances, increasing ton-mile demand and pushing up tanker values and charter rates.
He explained that the movement of petroleum products over longer distances increases demand for available vessels, as more tankers remain at sea rather than being available to load new cargoes.
Tukur also highlighted the impact of the Dangote Refinery on Nigeria’s petroleum shipping market, noting that the country’s dependence on imported refined products had declined as the refinery increasingly supplied domestic and international markets.
He said the refinery had reversed traditional shipping patterns, with Nigeria now exporting refined products, including aviation fuel and gas oil, to markets within West Africa and beyond.
He added that the refinery had also created new shipping requirements for crude oil and other feedstocks, including clean condensate used in gasoline blending.
However, Tukur identified the ageing domestic fleet, high vessel acquisition costs and limited access to affordable financing as major constraints facing indigenous ship owners.
He said the challenges were particularly significant in Nigeria’s coastal shipping market, where shallow-draft ports require vessels suited to local operating conditions.
Despite the constraints, he identified opportunities in refined petroleum product exports, ship financing and the development of Nigeria as a regional bunkering hub.
Dangote Refinery Seeks Faster Vessel Clearances
Head of Infrastructure & Marine Operations at Dangote Refinery, Captain Satendra Rana, said the cost of petroleum products was influenced by several factors across the logistics chain, including vessel availability, financing, port clearances, storage capacity and transportation infrastructure.
He explained that the refinery had adopted vessel vetting standards aimed at promoting safer and more efficient shipping operations, but noted that financing difficulties had encouraged the continued use of older vessels in the Nigerian market.
Rana said the refinery’s single-point mooring facilities had achieved turnaround times of less than 24 hours for very large crude carriers, while product tankers could be loaded within 12 hours.
However, he said delays in documentation, regulatory approvals and pre-berthing processes continued to increase costs across the shipping value chain.
According to him, the refinery had recorded 1,354 tanker calls at its facilities, comprising 400 crude oil tankers and 954 product tankers, as of the period covered by his presentation.
He added that the facility was expected to record 85 tanker calls in October 2026, reflecting the growing scale of its maritime operations.
Rana pointed out that the refinery was processing about 700,000 barrels of crude oil daily, with plans to expand its capacity, a development he said would significantly increase demand for maritime transportation.
He also called for a streamlined clearance system through which vessels could submit one comprehensive application accessible to all relevant government agencies.
Under the proposed system, which he described as a “green lane,” agencies would process applications concurrently or through a coordinated procedure to reduce delays before vessels berth.
He submitted that vessels were typically expected to complete their operations within 36 hours, warning that delays beyond agreed periods could trigger demurrage payments running into millions of dollars.
Rana argued that such payments increased operating costs and placed additional pressure on Nigeria’s foreign exchange resources.
He further called for transparent performance benchmarks to measure vessel clearance, berthing and turnaround times, with all relevant stakeholders held accountable for improving efficiency.
Financing constraints threaten indigenous shipping
The Dangote Refinery Marine Chief also raised concerns about the adequacy of financing available to Nigerian ship owners, noting that vessel acquisition costs had risen significantly.
He referred to the Cabotage Vessel Financing Fund, saying the financing available to operators needed to reflect the current cost of acquiring modern tankers.
Rana said the refinery was considering acquiring additional vessels, although deliveries were not expected until 2029, underscoring the long lead times involved in expanding the domestic fleet.
He also highlighted the role of larger product tankers in reducing road transportation requirements, explaining that one LR2 tanker could facilitate the movement of volumes equivalent to about 3,800 road tanker loads.
He said expanding maritime transportation capacity could reduce pressure on roads and improve the efficiency of petroleum product distribution.
Navy highlights maritime security
The panel also examined the importance of maritime security in protecting petroleum shipments and sustaining uninterrupted operations across Nigeria’s coastal waters.
Rear Admiral N. C. Ekum, representing the Chief of the Naval Staff, Vice Admiral Idi Abbas, said tanker shipping remained central to Nigeria’s economy and petroleum value chain.
He conveyed the Navy’s commitment to continued collaboration with industry stakeholders to strengthen maritime security and support the country’s economic interests.
His presentation was expected to outline the Nigerian Navy’s ongoing efforts to protect shipping activities and address security challenges affecting petroleum transportation.
The session brought together perspectives from shipping operators, refinery management and the Nigerian Navy, highlighting the interdependence of global freight markets, domestic vessel capacity, port efficiency and maritime security.
The discussions underscored the need for coordinated action by government agencies and private-sector operators to reduce logistics costs, strengthen indigenous shipping capacity and position Nigeria as a major petroleum supply and maritime hub in West Africa.
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