Lagos — Africa's richest man, Aliko Dangote, will build a 700 000-barrels-per-day East African oil refinery in Lamu on the Kenya coast, a senior company official said on Tuesday, ending speculation about the mega-project's location.

The location of the massive refinery, similar to Dangote's sprawling complex in Nigeria, was confirmed by Edwin Devakumar, vice president for oil and gas at Dangote Industries Limited, to AFP.

He added that it will take about 30 months to build the facility in East Africa's largest economy.

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There have been cryptic and conflicting messages about the project's location for months, with Tanzania and the Kenyan port of Mombasa also mooted.

Nigerian billionaire Dangote was in Tanzania late last month, where he met President Samia Suluhu Hassan and explained "the commercial and technical considerations behind the Group's decision to locate its planned East African refinery in Lamu", according to a statement from his office.

He also invited Tanzania to participate in the Lamu investment.

His 650,000-bpd refinery in Nigeria, operational since 2024, is the largest on the continent and is set to more than double capacity to 1.4 million bpd by 2028, making it the largest in the world.

Questions remain

There are still many question marks around the project in Kenya, not least regarding where it will source the oil for refining and how it will be financed.

Kenyan President William Ruto said in April that it would process oil from the Democratic Republic of Congo, Kenya, South Sudan, and Uganda.

But Kenya's oil reserves have yet to be pumped, while DR Congo's are only coming online in small quantities, around 20 000 bpd, according to the government, and only on the country's Atlantic coast, some 3 000km from Lamu.

South Sudan's production is much higher, at around 174,000 barrels per day, according to Juba. However, it has historically been piped through neighbouring Sudan.

A planned pipeline to Lamu has been stalled by conflict for over a decade.

That leaves Uganda, where crude is due to start production next year and be sent via a massive new pipeline to Tanzania, though even that can only cater for a maximum of 246 000 bpd.

Although there is clearly demand for a mega-refinery in the region, none exists in eastern or southern Africa. It could take decades to negotiate the deals and build the pipelines to Kenya, said Wambui Njehu Nzigo, an analyst at Control Risks.

"It will require so many different moving parts to fall into place at the right time," she told AFP.

Most importantly, the Uganda oil wells and the pipeline to Tanzania are majority-controlled by TotalEnergies, one of Dangote's biggest rivals.

"I don't understand why Total would grant Dangote the right to refine its oil," Amne Suedi, head of Tanzania's Shikani Investment and Advisory group, told AFP.

"None of this makes sense."

But she added: "Dangote is a very credible businessperson. And I don't think he would be venturing down this road if there were absolutely no opportunity."

-Nampa/AFP