Aliko Dangote has launched the next phase of expansion for the $25 billion Dangote Petroleum Refinery, signing a major equipment procurement agreement with China’s XCMG as the group targets doubling the facility’s processing capacity to approximately 1.3 million barrels per day by 2029.
The expansion is expected to transform the Lekki-based refinery into the world’s largest single-site crude oil refinery by processing capacity, reinforcing its position as a strategic energy asset for Nigeria while significantly enhancing its competitiveness in global refined petroleum markets.
The agreement with XCMG (Xuzhou Construction Machinery Group), one of China’s largest state-controlled construction equipment manufacturers, marks a major capital investment in the refinery’s second growth phase and signals Dangote Group’s confidence in long-term demand for refined petroleum products across Africa and international export markets.
Beyond expanding output, the investment is expected to improve operating efficiency through greater economies of scale, lowering production costs per barrel while strengthening the refinery’s export competitiveness against major refining hubs in Saudi Arabia, South Korea and the United States Gulf Coast.
At an installed capacity of about 1.3 million barrels per day, the refinery would evolve from a domestic energy infrastructure project into one of the world’s largest integrated export-oriented refining complexes, supplying refined petroleum products to African, European and other international markets.
The partnership also deepens industrial collaboration between Nigeria and China, providing Dangote access to XCMG’s large-scale engineering capabilities, manufacturing capacity and equipment supply chain, advantages expected to shorten project delivery timelines and reduce procurement costs compared with sourcing similar equipment from Western manufacturers.
As a state-controlled enterprise headquartered in Jiangsu Province, XCMG brings a quasi-sovereign dimension to the partnership that could facilitate equipment financing, logistics and project execution. Chinese manufacturers have become increasingly prominent partners in Africa’s infrastructure and industrial development, and the latest agreement extends a long-standing pattern of collaboration between Dangote Group and Chinese engineering firms.
The expansion announcement also strengthens the investment case for the planned listing of Dangote Petroleum Refinery on the Nigerian Exchange, widely regarded as the country’s most anticipated capital market transaction.
Dangote recently told American business publication Semafor that the refinery’s initial public offering remains on course and would represent a landmark event for Nigeria’s capital market. Market expectations suggest the refinery could command a valuation of at least $40 billion, with upside potential tied to production growth, operational performance and prevailing market conditions.
Investor appetite has continued to build ahead of the planned listing, with institutional demand for pre-IPO participation reportedly approaching $2 billion, reflecting confidence in the refinery’s long-term earnings potential and strategic importance within Africa’s energy value chain.
