Mombasa could host one of Africa’s biggest oil refining projects. This will be made possible if proposals by Nigerian billionaire Aliko Dangote move forward.
According to a report released by the Financial Times citing an interview with him, the plan involves a potential $15 billion to $17 billion (Sh2.2 trillion) investment. It aims at constructing a 650,000-barrel-a-day refinery. The refinery will play a big role in reduce East Africa’s dependence on imported fuel.
In the interview, Dangote indicated that Kenya is emerging as a strong contender for the project, pointing to infrastructure advantages along the coast.
Why is Mombasa Seen as the Best Site of the Project
“I’m leaning more towards Mombasa because Mombasa has a much larger, deeper port,” Dangote said in the interview.
The development comes after President William Ruto last month said that East African countries were in discussions over plans for a joint oil refinery at the Tanzanian port of Tanga, with the proposal modelled on Dangote’s existing refinery operation in Nigeria.
Dangote Compares Two Possible Locations for the Proposed Refinery
However, Dangote compared the two possible locations, Mombasa and Tanga, while highlighting market size and demand differences.
“Kenyans consume more. It’s a bigger economy,” he said.
He added that the final decision would depend on political direction from Nairobi.
“The ball is in the hands of President Ruto. Whatever President Ruto says is what I’ll do,” he said.
Cost of the Dangote Mombasa Oil Refinery
The Financial Times report further indicated that Dangote estimated the refinery project would cost between $15 billion (Sh1.932 trillion) and $17 billion (Sh2.1896 trillion).
Current State of Affairs on East Africa’s Oil Sector
East Africa currently imports all of its refined petroleum products, mainly from the Middle East, leaving the region exposed to supply disruptions and price spikes, particularly during periods of geopolitical tension such as the U.S.-Israeli war on Iran.
In addition, Dangote, speaking at an infrastructure summit in Nairobi last month, said he could replicate his 650,000-barrel-a-day Nigerian refinery in East Africa, provided governments in the region supported the initiative.
Also, countries like Uganda are gearing up efforts to establish an oil refinery. This project will boost oil production in the region and reduce dependence on oil imports.
Proposed Dangote Mombasa Oil Refinery Factsheet
Location: Mombasa, Kenya
Capacity: 650,000 barrels per day
Significance: the refinery will play a big role in reduce East Africa’s dependence on imported fuel.
Developer: Dangote Group
Cost: approximately $15 billion-$17 billion
