Nigeria is set to consolidate its dominance in Africa’s oil refining sector after the International Energy Community secured more than $50 billion for the construction of a 500,000 barrels per day refinery and 1,471 hectare free trade zone in Ondo State.
Prior to this project, the Skikda refinery in Algeria had a production capacity of approximately 356,500 barrels per day, making it the second largest refinery in Africa. Once operational, the Ondo refinery will supplant Skikuda and take over, making Nigeria home to both the continent’s largest and second-largest oil refineries.
The mega project, led by Backbone Infrastructure Nigeria Limited (BINL) in partnership with Canada’s NEFEX Holdings Limited, is one of the largest private sector energy investments in West Africa and is poised to become Africa’s second largest refinery after the 650,000 barrels per day Dangote refinery in Lagos.
A new stage in Africa’s refining story
A statement released by the company said the funding follows the signing of a Memorandum of Understanding (MoU) between BINL and the Ondo State Government through the Ondo State Investment Promotion Authority (ONDIPA).
BINL Chairman Ken Namani led the company’s management team on a courtesy visit to Governor Lucky Ayedatiwa, where discussions centered on the project’s potential to create thousands of jobs and attract complementary investments in logistics, storage and distribution.
Wale Adekola, BINL’s vice president of corporate services, explained that the project’s partner, NEFEX Petroline, brings extensive expertise from operations across the Middle East, Europe and North America.
“NEFEX Petroline combines the benefits of a global network with deep local understanding,” said Adekola, underscoring the long-term development implications of this venture.
Complementing Dangote and transforming Africa’s fuel market
The refinery is designed to supply refined petroleum products locally and across Africa, complementing Dangote’s existing production capacity and strengthening Nigeria’s foothold as the continent’s energy hub.
Together, these two giant refineries will be able to process more than 1.1 million barrels of crude oil per day, marking a transformational milestone for a continent long plagued by limited refining capacity and heavy dependence on imported fuel.
This figure is expected to increase to nearly 2 million barrels per day once Dangote completes its planned expansion, which will increase the refinery’s production capacity from 650,000 barrels per day to 1.4 million barrels per day. This will solidify Nigeria’s position as a world refining powerhouse and a central force in Africa’s energy transition.
Africa is gradually moving towards energy independence by increasing local refining production, aiming to supply its own market and export refined products across Africa.
