Dangote Group is moving ahead with plans to establish what could become East Africa's largest oil refinery, with the project expected to strengthen regional fuel security and significantly reduce reliance on imported petroleum products.
The proposed 700,000-barrel-per-day refinery will be located on Kenya's Lamu Island and is expected to take about three years to complete. Once operational, the facility will supply refined petroleum products to Kenya and neighbouring countries, marking the Nigerian conglomerate's most ambitious refining investment outside its home market.
According to a senior executive at Dangote Industries, the company intends to finance the multi-billion-dollar project through a combination of internally generated revenue, bond issuance and proceeds from a planned initial public offering (IPO).
"The site has been selected, soil tests are under way, and design and engineering work has commenced. Kenya was the choice from the beginning," Edwin Devakumar, Dangote Industries' Vice President for Oil and Gas, told Reuters.
Although Devakumar did not disclose the exact cost of the refinery, he said the investment would be comparable to the company's Lagos refinery, which became operational in 2024 after years of construction and delays.
The Lagos facility, built by billionaire industrialist Aliko Dangote, ultimately cost more than $20 billion, making it one of the world's largest single-train refineries. The project was initially estimated at around $9 billion in 2013, but expenses surged following a site relocation, engineering complexities, currency depreciation, disruptions caused by the COVID-19 pandemic and rising global inflation.
The planned Kenyan refinery forms part of Dangote Group's broader strategy to expand refining capacity across Africa following the successful launch of its 650,000-barrel-per-day refinery in Lagos. The company believes the new facility will help bridge the region's fuel supply gap while supporting economic growth and industrial development across East Africa.
Dangote has explored opportunities to establish a refining presence in East Africa for several months. Earlier plans had focused on Tanzania's port city of Tanga, but the company eventually shifted its attention to Kenya after assessing infrastructure, logistics and market conditions.
If completed as planned, the Lamu refinery would not only deepen Dangote's footprint across the continent but also reinforce its long-term ambition of becoming a leading supplier of refined petroleum products in Africa.