Dangote refinery thirsty for crude but short on credit

Nigeria’s Dangote refinery, the $20 billion plant funded by Africa’s richest man, is having trouble reaching its full refining potential – hamstrung by its need to borrow billions of dollars in working capital to be able to buy large volumes of crude, traders tell Reuters.

* The refinery started operations in January and has reached half its 650,000 barrels per day (bpd) capacity in recent weeks – but needs more capital to operate at full strength, which would make it the largest refinery in Africa and Europe.

* For instance, Chinese state energy major PetroChina has been waiting to unload a cargo of U.S. crude at Dangote for nearly a month due to payment issues, according to four trading sources and shipping data.

* Meanwhile, Nigeria has a large overhang of May-bound cargoes, even as its June programme has already emerged.

* This is likely the reason behind the a rare public offer on Tuesday by Mercuria, which offered a cargo each of May-loading Nigerian Qua Iboe and Escravos at dated Brent plus $2.15 and $2.20, with neither resulting in a purchase.