Dangote signs $400 million XCMG facilities contract for refinery expansion.
The expansion is targeted at 1.4 million barrels per day and will increase petrochemical and fertilizer production with the support of environmentally friendly machinery.
The expansion also aims to promote energy security, jobs, exports and foreign exchange stability across West and Central Africa.
Nigeria’s Dangote Group has signed a $400 million equipment agreement with China’s Xuzhou Construction Machinery Group (XCMG) to accelerate the expansion of its flagship refinery and related industrial projects. The agreement will see the supply of a range of large, ‘green intelligent’ machinery to support simultaneous developments across refining, petrochemicals, fertilizers and infrastructure.
The agreement is part of Dangote’s broader strategy to double the refinery’s capacity to 1.4 million barrels per day (bpd) within three years, triple urea production, expand production of polypropylene and linear alkylbenzenes, and advance its goal of becoming a $100 billion company by 2030. The Lagos refinery complex is positioned as the linchpin of this transformation.
Heavy equipment, bigger ambitions
The $400 million contract will see Dangote provide a wide range of advanced construction and industrial equipment to fast-track expansion projects already underway. The machinery package includes cranes, excavators, loaders, concrete batching systems and road construction units, as well as specialized equipment tailored for open pit mining, cement production and agro-processing operations across multiple sites.
According to a Dangote Group press statement, the agreement “sets out a framework for close cooperation based on mutual trust and common development goals (…) Both parties will give each other preferential consideration in projects arising from the partnership.”
A key element of this partnership focuses on “green intelligent” technologies. XCMG will deploy electric and hybrid heavy equipment designed to reduce carbon emissions and improve fuel efficiency across Dangote’s mine, refinery and logistics infrastructure.
The centerpiece of the expansion will be the Dangote Oil Refinery in the Lekki Free Zone, which will reach its initial full capacity of 650,000 barrels per day in early 2026. The new facility is expected to support an initial scale-up of 700,000 barrels per day, before doubling to a target of 1.4 million barrels per day around 2028 or 2029.
Besides fuel, the expansion will also significantly increase petrochemical production. Polypropylene production capacity will increase from approximately 900,000 tons per year to 2.4 million tons per year. In addition to Ethiopia’s existing 3 million tonne facility, Nigeria’s urea production will triple from 3 million tonne to 9 million tonne per year. Annual production of linear alkylbenzenes will reach 400,000 tons, making Dangote the largest supplier of detergents in Africa.
fuel, fertilizer, foreign exchange
For Nigeria, accelerating refinery expansion is aimed at reducing dependence on imported refined petroleum products, which have long weighed on foreign exchange reserves. Once fully scaled up, the refinery is expected to restructure fuel supplies across West and Central Africa, providing Euro VI compliant fuel and supporting regional export markets while stabilizing domestic supplies.
This expansion will also have major implications for employment and infrastructure. Construction activities related to the refinery’s second processing train and associated petrochemical unit are expected to support tens of thousands of jobs across engineering, logistics and manufacturing. The complex already includes a 435MW combined cycle power plant and extensive subsea gas infrastructure, strengthening Nigeria’s domestic industrial base and improving power reliability for heavy industry.
The project will financially support Nigeria’s ambitions to deepen its capital markets and attract long-term investment. Plans to list the refinery and fertilizer division on the Nigerian Exchange have the potential to increase local ownership while raising capital for further growth. Export earnings from refined fuels, petrochemicals and fertilizers could generate significant foreign exchange inflows, improve the trade balance and strengthen macroeconomic stability over the next decade.
“The Dangote refinery will have a production capacity of 650,000 barrels per day, making it the largest single-train refinery in the world,” African Refining and Marketing Association Executive Director Anibor Kulaga said in an exclusive interview with Energy Capital and Power, adding that it will significantly strengthen Africa’s energy security, reduce the need for imported crude oil and increase energy independence.
