Asia has become the top destination for Nigeria Dangote refinery's low-sulphur 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-sulphur fuel oil required to meet refuelling demand at the world's largest bunker hub Singapore.
A total of over 500,000 metric tonnes of Nigeria's LSSR have landed in Asia this year to-date, with another 255,000 tonnes arriving in September, data from analytics firm Kpler showed.
The second-largest destination is America, with volumes for Northern America and the Caribbean Islands totalling nearly 700,000 tonnes this year.
Domestic fuel demand
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-sulphur crudes such as US West Texas Intermediate results in more LSSR output, while exports also hinge on Nigeria's domestic fuel demand, Emril Jamil, senior analyst at LSEG Oil Research, said.
"They bought a lot of WTI. There will be more LLSR output as they are trying to ramp up the secondary units," Jamil said.
Test runs for petrol production
"Once the domestic demand issue is resolved, we might not be seeing more LSSR coming out."
The 650,000-barrel-per-day refinery, largest in Africa, has increased crude imports amid insufficient domestic supplies, while raising domestic crude requirements for second-half 2024.
It is currently undergoing test runs for petrol production, according to industry monitor IIR Energy.
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