1.

0 INTRODUCTION

On the 26th of September 2019, MSc civil engineering of the University of Ibadan
embarked on a field trip to Dangote refineries in Ibeju Lekki free trade Zone Lagos, Nigeria. On
arrival Mr. Ki shore and Engr. Haliru Auwalu gave us an overview of the project as well as the
scope of the project already completed.

1.1 PROJECT BACKGROUND

The Dangote oil refinery is an integrated oil refinery and petrochemical complex that is
under construction by the Dangote Oil Refinery Company, in the Lekki Free Zone Lagos,
Nigeria. The refinery is situated on a 6,500 acres (2,635 hectares) When complete, It will process
about 650,000 barrels of crude oil daily, transported via pipelines from oil fields in the Niger
Delta, where natural gas will also be sourced to supply the fertilizer factory and be used in
electrical generation for the refinery complex.

With a single crude oil distillation unit, the refinery will be the largest single-train
refinery in the world. At full production, the facility will be able to produce 50,000,000 litres, of
gasoline and 17,000,000 litres, of diesel daily, as well as aviation fuel and plastic products. With
a greater capacity than the total output of Nigeria's existing refining infrastructure, the Dangote
Refinery will be able to meet the Nigeria's entire domestic fuel demand, as well as export refined
products. Nigeria is estimated to hold approximately 37 billion barrels of proven oil reserves,
which is the second biggest in Africa. However, Nigeria imports majority of its refined products
due to lack of domestic refining capacity.

Early plans for the refinery was unveiled in September of 2013, when it was announced
about $3.3 billion in financing had been secured for the project. At the time, the refinery was
estimated to cost about $9 billion, of which $3 billion would be invested by the Dangote Group
and the remainder via commercial loans, and begin production in 2016. However, after a change
in location to Lekki,in Lagos State, allegedly dangote group relocated the refinery from the
Olokola Free Trade Zone in Ondo State to the Lekki Free Trade Zone in Lagos over the inability
of the Dangote Group to reach an agreement with the host communities in Ondo State, initially
the choice of Ondo state was because of the relative peace in the state compared to the other
options, but the Olokola and Igbokoda communities, which were supposed to be the host

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communities were said to be very unreasonable in their demands. Construction of the refinery
did not begin until 2016 with excavation and infrastructure preparation, and the planned
completion was pushed back to late 2018.

In July 2017, major structural construction began, and Dangote estimated that the refinery
would be mechanically complete in late 2019 and commissioned in early 2020. The refinery will
produce Euro-V quality gasoline and diesel, as well as jet fuel and polypropylene. The project is
expected to generate 9,500 direct and 25,000 indirect jobs.

An associated project at the site of the refinery, a urea fertilizer factory, is scheduled to
begin operation in late 2018 and produce about three million tons of urea annually.

As of 2019 the project cost has increased and is expected to cost up to $15 billion in total,
with $10 billion invested in the refinery, $2.5 billion in the fertilizer factory, and $2.5 billion in
pipeline infrastructure.

1.2 PROJECT SECTIONS VISITED

1. Refinery yard
2. Fertilizer plant
3. Jetty area

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2.0 PROJECT OVERVIEW
2.1 PROJECT DESIGN
Engineers India Limited designed dangote refinery and petrochemical complex, while
other contractor are responsible for the design to provided specification and supplly of
major equipments and components such as UOP, DuPont, EMRE, Jacobs, Air
Liquide & INEOS.
2.2 PROJECT STATUS
 95% Engineering–completed.
 90% Procurement completed.
 All Over Dimensional Cargo (ODC) and Long Lead Items (LLI) orders placed.
 Expediting Manufacturing and Delivery–Inprogress.
 92% Tenders awarded.
 Contractors Mobilized Piling, Reinforced Concrete Cement (RCC), Underground Piping
(UGP), Roads and Drains, Buildings.
 Vertical Contracts – All contract signed. Mobilization started.
 Horizontal contracts –10 to 12 contractors selected for each activity (Piling,RCC, UG
Piping, Roads and Drains).
 1,030 nos construction equipment ordered. 592 nos. in use by contractors.
 75% civil contractors mobilized
 75% Above ground vertical contractors mobilized / undermobilization

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2.3 PROCESSING UNITS VISITED

Figure 2.1 Refinery configuration

1. Crude distillation unit (CDU) is where the different hydrocarbons present in crude oil
will be separated into useful fractions and some converted into products with a higher
quality performance, the two main primary separation processes of are atmospheric and
vacuum distillation, dangote refinery features the atmospheric distillation unit which
separates the components under atmospheric pressures.

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Plate 2.1 3D image of the Crude distillation unit

2. Mild hydrocracking (MHC) unit

Mild Hydrocracking or MHC is referring to the refining process designed to performs a partial
hydrocracking only.In the mild hydrocracking only about 20-60% at ~ 50-85 bar of the feedstock
crude oil is cracked.he objective of the Mild Hydrocracking process is to convert 20-60% of the
vacuum gas oil at 343°C to low sulphur distillates and produce high quality cat cracker
feedstocks.

Refining runs through two different types of processes; hydrotreating and hydrocacking.

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Plate 2.2 3D image of Mild hydrocracker unit (MHU)

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 3. Residual fluid catalytic cracking (RFCC) is one of the most important conversion
processes used in petroleum refineries, it is used to convert high boiling point, high
molecular weight hydrocarbon fractions of petroleum crude oil into valuable gasoline,
olefinic gases and other products, below is an image of Dangote refineries residual fluid
catalytic cracking unit, it consists of the main column, the tractor and regenerator ( )

Plate 2.3 Residual fluid catalytic cracking (RFCC)

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Plate 2.4 Regenerator unit

Plate 2.5 Naphtha hydrotreater

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Plate 2.6 Sulphur recovery and hydrogen generation

Plate 2.7 Jetty

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2.4 Site facilities

2.4.1 Processing units

The processing facilities at the refinery include a crude distillation unit (CDU) and
associated facilities, a mild hydrocracking (MHC) unit, residual fluid catalytic cracking
(RFCC), naphtha hydrotreater and RFCC gasoline hydrodesulfurisation (HDS) unit, as
well as alkylation units.Sulphur recovery and hydrogen generation facilities and a
polypropylene unit are also part of the refinery. The hydrogen generation complex will
consist of two steam methane reformer (SMR) units. It will generate 200,000Nm³/h of
hydrogen and steam, which will be used to produce sulphur-free fuels.

Additional processing units include a set of units supplied by DuPont to produce clean
fuels. These units include the STRATCO® alkylation unit and the MECS® sulphuric
acid regeneration (SAR) unit. The MECS® DynaWave® sulphur recovery unit and
BELCO® EDV® fluid catalytic cracking unit are also included.

2.4.2 Site Infrastructure

The refinery will feature infrastructure facilities such as a pipeline system, access roads,
tank storage facilities, and crude and product-handling facilities. A marine terminal,
including a breakwater, jetty and harbour, is also part of the refinery.

In addition, an administrative building, guardhouses, fire station and pump stations will
be part of the facility.

The refinery complex will also include a fertiliser plant, which will utilise the by-
products from the refinery as raw materials.

2.5 Benefit to host community

Benefit to host (Ibeju Lekki community)

 Mobile Clinics-collaboration with local government for free consultation

 Diagnosis, provision of drugs for aliments like malaria, fever etc.

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  Construction of Schools, Hospitals / Community Health Centres
 Access to micro credit system and merit scholarships
 Health Program-Eye treatment and health awareness campaign
 Educational Development Program
 Institutionalize scholarships for meritorious candidates
 Enhance Infrastructure in host community primary schools
 Construction of computer training centre for indigenous youth
 Youth Empowerment Program:- Promotion of vocational training and – establishment of
computer training centres
 Development and training of youth entrepreneurs for COCO shops

Benefit to host (Nigeria)

Nigeria is the largest oil and gas producer in Africa and proven oil reserves are estimated
by the United States Energy Information Administration (EIA) at between 16 and 22
billion barrels (2.5×109 and 3.5×109 m3). Nigeria produced about 2.53 million barrels
(402,000 m3) per day, despite this wealth of petroleum reserve, in 2018 Nigeria spent
54.645 billion dollars on petroleum products importation, showing how deficient Nigeria
at meeting local fuel demand. When Dangote refinery is completed not only will Nigeria
be able to meet its petroleum product demand, but will have exportation capability as
shown in the table below

Table 2.1 Nigeria’s consumption and supply after refinery completion

Products Consumption Production MMTPA Surplus MMTPA

MMTPA
Gasoline 12.9 14.0 1.1
Kerosene 2.3 2.8 0.5
Jet 0.3 2.4 2.1
Diesel 2.7 7.6 4.9
Total 18.2 26.8 8.6

30MMTPARefinery.

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•Flexibility to convert depending on dynamics of demand
•Kerosene to Jet
•Jet/Kerosene to Diesel
In addition to achieving self-sufficiency and export capability, the following are the
benefits of the Dangote refinery to Nigeria.

1. Economic benefit
 Annual foreign exchange earnings from exports 5.5 billion US dollars
 Annual foreign exchange saving from import substitution of 7.5 billion US dollars.
 Guaranteed sale of 650,000 per day of crude oil.
 Development of local area and ancillary industries.
 Availability of high quality products (euro V grade).
 Production of petrochemicals.
 Increased demand for domestic crude.
 Unhindered availability of the product.

2. Employment.
According to Mr. Ki Shore at the peak of the project over 70,000 people will be working
on the project at the implementation stage and 135,000 people will be working on the
project at the operational stage. Table …. below shows the implementation stage
employment statistics
Table 2.2 Employment statistics of the project

Type Project Stage Operating Refinery

Direct 1,500 1,200
Employees 1,500 1,200
Indirect 70,000 138,000
Contractors on site 60,000 1,000
Service Providers 10,000 2,000
Retail Outlets and Trucks 135,000

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 3. Generation of power
The combined output of the steam and gas turbine facility will generate a combined 400
Megawatt of electricity the surplus of which will be transmitted to the national grid. The
table below shows the breakdown of the power generation facility.
Table 2.3 Power generation facility and numbers

Description Numbers Capacity / Unit

Gas Turbines 8 34.5MW/ 110TPHSteam
STGs 4 31MW
Boilers 8 110TPHSteam

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3.0 PROJECT EXECUTION STRATEGY

3.1 Project management strategy

Project owner (Client/customer)

Dangote group which according to the CEO is putting up more than 6 percent of the total project
cost is a Nigerian multinational industrial conglomerate founded by Aliko Dangote. The group
embarked on the landmark project of constructing the largest single train refinery and
petrochemical complex in the world, which is scheduled to be completed by the year 2020.

Project manager

Dangote oil refinery company (DORC) - a subsidiary of Dangote group is in charge of the
project which is estimated to cost between 12-14 million dollars.

Contractor

Engineers India Limited an Indian company is the major contractor with vast experience in the
field of oil and gas having carried out over 80 major refinery projects, 43 oil and gas processing
projects, 213 offshore platforms etc. Other contractors engaged in the project are UOP
Honeywell, C&I Leasing, Hang Xiao Steel Structure Company, Jan De Nul Group etc.
(International contractors), Boskalis Westminister Ltd, Cakasa Nigerei Company Limited, GTA-
Powermech, JuliusBerger Nigeria, Omiti Engineering Ltd, Rockseed International (Nigerian
contractors).

2.6 Major contracts awarded to international contractors

1. Engineers India Ltd (EIL) - awarded the engineering, construction and procurement
contract for the refinery.
2. UOP Honeywell - was selected to license process technology and provide catalysts and
equipment for the refinery and petrochemical plant. Under the contract, UOP will provide
its resid fluid catalytic cracking process and supply propylene, to produce transportation
fuels and polypropylene respectively.
Other UOP technologies at this complex will include CCR Platforming, Unicracking and
Penex processes to produce high-octane gasoline blending components, diesel and high-

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 octane gasoline. UOP's alliance partner, Process Consulting Services will provide crude
distillation unit (CDU) design. The company will also supply catalysts, adsorbents and
certain equipment for the refinery and petrochemical complex.
3. C&I Leasing - experts in fleet management, personnel outsourcing and marine Services.
is responsible for providing transportation and installation services for mooring systems and
subsea pipelines of the refinery.
4. HangXiao Steel Structure Company was awarded a $112m contract to supply steel structures for
the refinery.
5. Jan De Nul Group was responsible for land reclamation which was said to have cost up to 300
million Us dollars making use of the largest hopper suction dredgers in the world. 54.5million m3
of sand was used in creating 2400 hectares of land.

Major contracts awarded to Nigerian contractors -

1. Boskalis Westminister Ltd - To facilitate the import of out-of-gauge components and

other materials required for construction activities, a port need to be constructed. In
October 2017, Boskalis was awarded the contract for the dredging of an access channel, a
turning circle and a port basin. In addition, Boskalis carried out work to reclaim an
innovative sandbar, constructed the sandbar groin and north groin, as well as lee-side and
basin revetments. In anticipation of future erosion of the beach to the east of the port, a
geo-tubes sleeping defense system and sand engine were built.
2. Cakasa Nigerei Company Limited - an indigenous company was awarded the contract of
roof lifting Roof lifting of 30,000 metric tonne Ammonia Tank at Dangote Fertilizer
Plant.
3. GTA-Powermech –Secured the 78 million dollar contract to supply Mechanical, Civil,
Architectural, E& I ETC of 8 GT/GTG, 8 HRSG, 4 Utility Boiler, 4 ST/STG of 400 MW
at DORC’s(Dangote) Captive Power Plant.
4. Omiti Engineering Limited was awarded a 78 million dollar project to provide the
following services
 Construction of reinforced Concrete Foundation works,
 Collection of all Pipes, pipe fittings, valve & accessories,
 Procurement of PPR & UPVC Pipes, Fabrication & Installation of Underground Piping
works, Testing,

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  Pre-commissioning & commissioning of the piping system,
 Collection of all prefabricated Steel structures and accessories,
 Procurement of secondary steel materials, supply of equipment etc.
5. JuliusBerger Nigeria was responsible for constructing drainage systems and assess roads
on the refinery site

A summary of the Nigerian companies awarded major contracts and breakdown of the total
number of Nigerian contractors with the value of contract awarded are shown in table ...... and .....
respectively.

Table 2.4 Nigerian contractors

Range Mn$ No. Of Contractors Value Mn US$ %

1-10 55 92 21
20-25 4 90 21
50-100 3 253 58
Total 62 435 100

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Table 2.5 Top 6 contractors and value of contract awarded

Contractor Name Value

Mn US$
Boskalis WestministerLtd 38
Cakasa Nigerei Company 18
Limited
GTA- Powermech 76
JuliusBerger Nigeria 18
Omiti Engineering Ltd 78
Rockseed International 15
TOTAL 242

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4.0 Project safety and waste management

4.1 Safety management systems

 Highly trained and qualified Safety Staff

 Weekly meetings with Contractors to address safety concerns.
 Regular Sites afety inspection for closure of unsafe acts and conditions.
 Mandatory use of Personal Protective Equipment (PPE).
 HSSE Manual (Risk control process, Health, Safety Management, Security, Accidents,
Incidents and Emergencies) for Refinery.
 Availability of Safety documents on line.

4.2 Safety Standards

All units & utilities conform to world-class safety standards.

Safety distances between units/between various equipment within unit, wind direction
criteria followed in overall plot plan and equipment layout development following safety
codes such as API, AFPM etc.
Complete fire protection system with international SAFE practice.
Suitable instrumentation to ensure alarm and trip to avoid material / personal damage.
All process units, utilities and offsite systems designed and analyzed for exigency
scenario and mitigation measures through ESD Logic.
Emergency isolation, shutdown valves, Hydrogen, Hydrocarbon, H2S detection systems
in unit and Offsite areas.
HAZOP study being conducted by independent HAZOP Chairman involving Licensor,
Owner/DPR representatives& DEC and recommendations being implemented.
SIL study being carried out with independent Chairman and necessary SIL rating will be
assigned.

4.3 Fire protection system

 All relevant API codes and National Fire Protection norms used for Fire Protection, Electrical and
relevant areas.
 Conceived to operate both in prevention and extinguishing mode.

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  All HC releases in the complex routed to a separate acid flare.

4.4 Raw Water Source, Consumption and Conservation Measures

 Best Practices in environmental norms ensured.

 Reduce, Reuse & Recycle Methodology ensured.
 Low use of Fresh Water & Low discharge of effluent.
 More stringent US & European standards adopted.
 Ensures sustainability.
 Effluents generated are recycled after treatment in the RO (Reverse Osmosis) Plant.
 Stripped sour water is reused as wash water within the refinery to reduce the effluent as
well as the make-up.

4.5 Waste Water Treatment and Reuse

 Liquid effluent streams generated within refinery are treated in a central effluent
treatment plant.
 Part of the treated effluent reused for DM water generation/ fresh water makeup within
refinery.

Central effluent treatment plant comprises of OWS/Process Effluent Chain, Contaminated

Rain Water Treatment Chain, Sanitary Effluent Treatment Chain and Spent Caustic
Treatment Chain.

4.6 Solid Waste Management

 SolidwastegeneratedinconstructionphaseshallbesegregatedanddisposedofftoCementKilnsa
s feed.
 RFCC spent catalyst will be used in the cement kilns as feed.
 Bottom sludge or any waste generated from process units to be used in cement kilns as
fuel.
 Biological waste from water treatment plants hall beutilized for the green belt
development inside the refinery.

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5.0 Dangote refinery in project management perspective

5.1 Project time, cost and quality management

The initial project cost estimate stood at 9 billion dollars and work was to start in 2013 with an
expected completion date of 2019 but this was with the exception of the fertilizer production
plant which its estimated cost stands at 2.5 billion dollars. The construction did not start until
2016 and speculated project completion date being 2022 as against the officially announced date
by DORC of September 2020 mechanical completion time. The late delivery of steel is said to be
partly responsible for the delay in 2013 to 2016 timeline.

The total project cost as it stands is speculated to be between 12 to 14 billion dollars fro the
initial 9 billion dollar estimate, this increase could be attributed to the client or customer
(Dangote group) altering the project scope to include the fertilizer plant, but even this does not
explain the possible 50 percent increase in the project cost. The basic relationship between time
and cost of a project with the fact that increase in project time will definitely cause an increase in
project cost both direct (variable cost) caused by shortage of material, increase of man hours,
inflation etc., and indirect or overhead cost; services, administration, management etc.,
invariably increases project cost.

5.2 Project integrated management

Considering the complexity of the Dangote refinery and petrochemical complex there
will be the need to coordinate all elements of the project. Including coordinating tasks, resources,
stakeholders, and all other project elements, in addition to managing conflicts between different
aspects of a project, making trade-offs between competing requests and evaluating resources.

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