Asia leads in fuel oil imports from Nigeria's Dangote, but volumes may fall
Asia has become the top destination for Nigeria Dangote refinery's low-sulfur straight run (LSSR) fuel oil exports in 2024 so far, data showed, though trade sources expect volumes to taper off going ahead.
LSSR exports from the newly commissioned refinery can help to ease supply tightness in Asia, a region that is structurally short on low-sulfur fuel oil required to meet refueling demand at the world's largest bunker hub Singapore.
A total of > 500,000 metric t of Nigeria's LSSR have landed in Asia this year to date, with another 255,000 t arriving in September, data from analytics firm Kpler showed.
The second-largest destination is America, with volumes for Northern America and the Caribbean Islands totaling nearly 700,000 t this year.
Stronger prices have drawn barrels over in recent months, with Asia receiving its first cargo in June, though trade sources expect Dangote to produce and export less LSSR going ahead as it ramps up its refining unit.
"Since we are starting the RFCC (residue fluid catalytic cracking unit) now, this volume (of LSSR) will go down very drastically," a senior executive at Dangote said, adding that crude is not a constraint so far.
Processing lower-sulfur crudes such as U.S. West Texas Intermediate results in more LSSR output, while exports also hinge on Nigeria's domestic fuel demand, said Emril Jamil, senior analyst at LSEG Oil Research.
"They bought a lot of WTI. There will be more LLSR output as they are trying to ramp up the secondary units," Jamil said. "Once the domestic demand issue is resolved, we might not be seeing more LSSR coming out."
The 650,000-bpd refinery, the largest in Africa, has increased crude imports amid insufficient domestic supplies, while raising domestic crude requirements for 2H 2024.
It is currently undergoing test runs for gasoline production, according to industry monitor IIR Energy.
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