Dangote Group has sealed a $400 million equipment agreement with China’s Xuzhou Construction Machinery Group to accelerate expansion of its oil refinery towards a planned 1.4 million barrels per day (bdp).
In a statement on Tuesday, the company said the deal will enable it to acquire heavy duty machinery required to advance construction across refining, petrochemicals, agriculture and infrastructure projects.
According to the statement, the equipment will complement existing assets already deployed at the refinery complex, which the group expects to complete within three years.
“The additional equipment we are acquiring under this partnership will significantly enhance execution across our projects,” the company said.
The refinery, located in Lagos, is designed to reduce Nigeria’s reliance on imported refined fuel and reposition the country as a net exporter of petroleum products.
Dangote refinery expansion plan
Dangote said the expansion programme will increase polypropylene production capacity to 2.4 million tons per year from 900,000 tons.
Polypropylene is widely used in packaging, plastics and manufacturing, and higher output is expected to strengthen domestic supply while supporting exports.
Urea production in Nigeria will rise to 9 million tons per year under the plan. This will complement an existing 3 million ton plant in Ethiopia, bringing total capacity to 12 million tons annually.
The group aslo stated that the combined output will position it as the world’s largest urea producer. Urea is a key fertiliser used in agriculture and is central to food production across Africa and other regions.
In addition, new base oil capacity is included in the programme.
Dangote described the equipment agreement as a strategic investment aligned with its target of becoming a $100 billion enterprise by 2030.
What you should know
The refinery, valued at about $20 billion, began operations in 2024 after years of delays linked to financing and technical adjustments. Once fully operational, it is expected to process up to 650,000 BDP in its initial phase, reducing Nigeria’s heavy dependence on imported refined fuel.
Nigeria, despite being Africa’s largest oil producer, has historically relied on fuel imports due to limited domestic refining capacity. This has exposed the country to foreign exchange pressure and supply disruptions.
The expansion towards 1.4 million bdp signals a broader ambition to serve markets beyond Nigeria. West and Central African countries currently import large volumes of refined products from Europe and other regions.
By scaling up refining and petrochemical output, Dangote aims to capture a larger share of regional demand.
The additional machinery from XCMG is expected to speed up ongoing construction and improve project delivery timelines.
