Dangote Group Commits $400 Million to Expand Refinery Capacity to 1.4 Million Barrels Daily
Africa's largest refinery operator has signed a major equipment deal with China's XCMG Construction Machinery, targeting a 40% capacity increase that would position the facility among the world's top petroleum processing plants.
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Dangote Group has executed a $400 million equipment procurement agreement with XCMG Construction Machinery Company Limited to expand its Nigerian refinery operations to 1.4 million barrels per day, according to announcements from both companies on February 17, 2026.
The expansion represents a 40% capacity increase from the facility's current 650,000 bpd operational level, which began commercial production in late 2023. The Lagos-based complex, already Africa's largest single-train refinery, would rank among the top 15 global petroleum processing facilities by capacity upon completion of the expansion.
According to Nairametrics, the agreement covers construction equipment deployment for "refining and industrial operations across Africa," suggesting the deal extends beyond the flagship Nigerian facility. The transaction marks one of the largest single equipment procurement contracts in African industrial history and represents approximately 8% of the $5 billion total investment in the original refinery construction.
XCMG Construction Machinery, a Xuzhou-based heavy equipment manufacturer with operations in 188 countries, will supply specialized machinery for civil works, materials handling, and infrastructure development required for the capacity expansion. The company ranks as China's largest construction equipment exporter and third-largest globally by revenue, with 2025 sales exceeding $18 billion.
The expansion comes as the Dangote refinery works to stabilize production following a protracted ramp-up period. The facility processed approximately 350,000 bpd during Q4 2025, below its nameplate capacity, due to crude supply constraints and operational adjustments. Industry analysts estimate the plant requires 300,000 bpd of Nigerian crude to operate at optimal levels, though domestic supply agreements have proven challenging to secure.
Legit.ng reported the expansion targets 1.4 million bpd capacity, which would enable the facility to process approximately 510 million barrels annually. At current Brent crude prices of $82 per barrel, the expanded facility would handle approximately $41.8 billion worth of crude oil annually, generating substantial downstream product value through gasoline, diesel, jet fuel, and petrochemical outputs.
The timing of the expansion aligns with growing petroleum demand across West Africa, where refined product imports cost the region approximately $25 billion annually. Nigeria alone imports roughly 90% of its refined petroleum products despite ranking as Africa's largest crude oil producer, creating a structural trade deficit the Dangote facility aims to address.
Financial analysts note the $400 million capital commitment signals continued confidence in the project's commercial viability despite earlier challenges. The Dangote Group secured $2.4 billion in loan facilities from the African Export-Import Bank and a consortium of Nigerian banks in 2024 to support working capital requirements, with the latest equipment deal likely financed through a combination of internal cash flows and additional credit facilities.
The expansion timeline remains unspecified in available announcements, though industry sources suggest major refinery capacity additions typically require 24-36 months from equipment procurement to commercial operation. The project will test Nigeria's ability to supply sufficient crude feedstock, with the Nigerian National Petroleum Company Limited mandated to provide 300,000 bpd to the facility under domestic supply obligations.
Beyond petroleum refining, the Dangote Group operates cement, fertilizer, and petrochemical facilities across 10 African countries, with the XCMG agreement supporting broader industrial expansion plans. The conglomerate's fertilizer plant in Lagos, which commenced operations in 2021, produces 3 million tonnes annually, while its cement operations span Nigeria, Senegal, Ghana, Ethiopia, and Tanzania.
The deal positions XCMG for deeper penetration of African infrastructure markets, where Chinese equipment manufacturers have captured approximately 35% market share over the past decade. The company maintains assembly facilities in seven African countries and has supplied equipment for major projects including the Standard Gauge Railway in Kenya and the Julius Nyerere Hydropower Project in Tanzania.
Completion of the refinery expansion would significantly impact regional petroleum product flows, potentially reducing West Africa's refined product import dependency by 15-20% and altering trade patterns that currently favor European and Middle Eastern exporters. The facility's proximity to major West African markets provides logistical advantages over imports, with shipping times to regional ports averaging 3-5 days versus 14-21 days from Rotterdam or Jamnagar.