Dangote Refinery plans to dispatch its first shipment of low-sulfur straight-run fuel oil (LSSR) from Nigeria to Singapore this week, marking its debut in the Asian market. This shipment establishes a new trade route from the recently inaugurated refinery to Asia, addressing the persistent demand for low-sulfur fuel oil used for refueling ships at Singapore, the world's largest bunker hub, as confirmed by ship tracking data and industry sources.
Since commencing operations in January following a $20 billion investment, the Dangote refinery boasts a capacity to process up to 650,000 barrels of products daily. Upon achieving full capacity, it will stand as the largest refinery in Africa and Europe. Starting from March, the refinery has escalated its exports of low-sulfur straight-run fuel oil (LSSR), primarily directing shipments to the Americas and Europe, according to ship tracking data from Kpler and Vortexa.
The inaugural shipment heading towards Asia is expected to reach its destination soon. The vessel Front Brage, chartered by Glencore, will transport around 124,000 metric tons (equivalent to 787,400 barrels) of low-sulfur straight-run fuel oil (LSSR) to Singapore. According to industry sources, the decision to redirect this cargo to Asia was influenced by lower demand in Europe. Data from LSEG reveals that the east-west spread for front-month 0.5 percent low-sulfur fuel oil (LSFO), which indicates the price difference between these regions, remained above $40 per ton throughout the current week.
Dangote’s LSSR cargoes are priced against Rotterdam’s 0.5 percent LSFO quotes on a free-on-board basis, although the specific pricing differential for this shipment was not disclosed by market sources. According to ship tracking data, another LSSR shipment from the Dangote refinery, containing around 157,000 tons, is expected to reach Singapore in July aboard the vessel Stena Suede.
Low-sulfur straight-run fuel oil (LSSR) is typically blended with other fuels to produce low-sulfur fuel oil (LSFO) for bunkering purposes or utilized as feedstock in diverse refinery operations. In February, Dangote initiated its exports of oil products and commenced acquiring crude oil, primarily sourced from the Nigerian National Petroleum Company (NNPC) Ltd, starting from December 2023.