Billionaire Dangote plans undersea fuel pipeline to Ghana

Nigerian billionaire Aliko Dangote’s group plans to build an undersea pipeline to carry petrol and other refined fuels from its refinery in Lagos to Ghana, while Kenya is reviving a long-stalled crude oil pipeline to supply the refinery he is building on its coast.

The West African line would start at the Dangote Petroleum Refinery in Lekki, on the eastern edge of Lagos, and run to Apapa, the city’s main port, people close to the Dangote Group said. From there it would go under the sea past Seme, on the border with Benin, to Lomé in Togo, and on to Takoradi or Tema in Ghana. The route would broadly follow the West African Gas Pipeline, which already carries Nigerian natural gas along the same coast to Benin, Togo and Ghana.

Construction would begin in 2028, after the group completes or advances fuel infrastructure it is building in Kenya, Djibouti, Ethiopia and Namibia, the people said. The cost, length and capacity of the pipeline have not been disclosed.

The line would let the refinery supply Togo directly and compete with Lomé’s storage terminals, a regional trading hub from which Nigerian fuel marketers still import some petroleum products. Dangote has pushed for years to replace imported fuel in West Africa with output from his 650,000-barrel-a-day plant, the largest single-train refinery in the world.

Kenya revives Turkana link

In East Africa, a senior economic adviser to Kenyan President William Ruto has confirmed that the government plans to revive a pipeline from the Turkana oil fields in the country’s northwest to Lamu, on the Indian Ocean coast, where Dangote broke ground on a 700,000-barrel-a-day refinery on Sept. 30. The project was dropped years ago over doubts about whether it could be financed. Turkana crude is expected to be one of several sources of oil for the refinery.

Ruto said in September that Kenya was discussing the pipeline with Dangote, and at the groundbreaking he said the two sides had agreed to invest in a line from Turkana to Lamu so that crude could be moved to the refinery.

The pipeline was first planned about a decade ago, when Tullow Oil Plc and its partners were developing the Turkana discoveries. It was designed to run about 892 kilometers from the South Lokichar basin to Lamu and carry 80,000 to 120,000 barrels a day, and in 2018 its cost was estimated at $1.1 billion. The project stalled as Tullow struggled to bring the fields into production. Kenyan group Gulf Energy bought Tullow’s Kenyan assets last year for at least $120 million and is aiming to start production on Dec. 1. The first phase targets about 20,000 barrels a day, to be trucked to Mombasa until a pipeline is built.

A wider fuel network

The two pipelines are part of a network of depots, pipelines and supply routes that Dangote is building across Africa as part of about $50 billion his group plans to invest between 2026 and 2030. In September Dangote agreed to help fund a $660 million fuel pipeline from Djibouti to Ethiopia, and in October his group bought 24.76% of Kenya Pipeline Co., the state-controlled operator of Kenya’s fuel network, for about 42.5 billion shillings ($327 million). He has also outlined a 2,650-kilometer, $3.5 billion pipeline to carry fuel across Namibia, Botswana and South Africa.

The Lamu refinery is estimated to cost about $16 billion. Dangote has pledged to finish it within 40 months and has offered East African governments a combined 30% stake.

Dangote, 69, is Africa’s richest person, with a net worth of $55.4 billion, according to Forbes. He built his fortune in cement, sugar and flour before moving into fertilizer and oil refining.

Figures were converted at 129.9 shillings to the dollar.