Dangote Industries Limited has commenced preliminary work on its proposed $17 billion, 700,000-barrels-per-day oil refinery in Kenya, marking the first major step towards what is expected to become East Africa’s largest refining project.
The company said the project has moved beyond the planning stage, with the site selected, soil investigations underway and engineering and design work in progress ahead of construction.
The refinery, to be located on Lamu Island off Kenya’s coast, is expected to be completed within about three years and will supply refined petroleum products to Kenya and neighbouring countries, reducing East Africa’s reliance on imported fuels.
The development follows reports by Bloomberg that President of the Dangote Group, Aliko Dangote, plans to invest up to $17 billion in the project as part of the company’s expansion into East Africa.
According to the report, the proposed refinery will replicate the group’s Lagos refinery and process about 700,000 barrels of crude oil per day when completed.
Dangote Industries’ Vice President for Oil and Gas, Devakumar Edwin, confirmed that significant progress had been made on the project.
“The site has been selected, soil tests are underway, and design and engineering work has commenced. Kenya was the choice from the beginning,” Edwin told Reuters.
He added that Lamu was selected for commercial and technical reasons, while noting that Tanzania had initially been considered before Kenya emerged as the preferred location.
The refinery will be Dangote Group’s largest refining investment outside Nigeria and forms part of its strategy to expand refining capacity across Africa following the successful commencement of operations at its 650,000-barrels-per-day Dangote Petroleum Refinery in Lagos.
Edwin said the project would be financed through a combination of internally generated funds, bond issuances and proceeds from the company’s planned initial public offering.
Although he declined to disclose the exact cost of the project, Edwin said it would be comparable to the Lagos refinery, which ultimately cost more than $20 billion before it commenced operations in 2024.
The investment comes as Dangote Industries pursues a parallel expansion programme in Nigeria to double the capacity of its Lagos refinery from 700,000 barrels per day to 1.4 million barrels per day by 2028.
The company has also unveiled plans to increase its combined refining capacity to 2.1 million barrels per day across Nigeria and Kenya.
Speaking during a recent visit by officials of the Republic of the Congo’s national oil company, Société Nationale des Pétroles du Congo, to the Dangote Petroleum Refinery in Lagos, Edwin said the expansion would comprise 1.4 million barrels per day in Nigeria and the proposed 700,000-barrels-per-day refinery in Kenya to serve East African markets.
He further disclosed that the group plans to invest an additional $46 billion between 2026 and 2028 across its refining, cement and fertiliser businesses as part of its long-term industrial expansion strategy across Africa.
The proposed Kenyan refinery reflects growing efforts by African countries to strengthen domestic refining capacity, improve energy security and reduce dependence on imported petroleum products.
Despite producing millions of barrels of crude oil daily, Africa continues to export most of its crude while importing a significant proportion of its refined petroleum products because of inadequate refining infrastructure.
According to the African Petroleum Producers’ Organisation, the continent exports about three-quarters of the crude oil it produces while importing approximately 70 per cent of the refined petroleum products it consumes.
This imbalance has exposed many African economies to volatile international fuel prices, high transportation costs and persistent foreign exchange pressures.
The commissioning of the Dangote Petroleum Refinery in Nigeria has begun to reverse that trend by increasing domestic fuel production and reducing the country’s dependence on imported petroleum products.
The refinery has also renewed interest among African governments and private investors in developing domestic refining capacity. Besides the Kenyan project, Mozambique is considering a proposed 200,000-barrels-per-day refinery being promoted by Nigerian businessman Benedict Peters, while Uganda is advancing plans for a 60,000-barrels-per-day refinery to serve its domestic market and neighbouring countries.
