Energy Consortium Secures $50 billion to Build Africa’s Second-largest Refinery in Nigeria

An international energy consortium has secured a $50 billion investment to develop what is set to become Africa’s second-largest oil refinery in Ondo State, Nigeria, significantly strengthening the continent’s refining capacity.

Nigeria is set to consolidate its dominance in Africa’s oil refining landscape as an international energy consortium secured over $50 billion for the construction of a 500,000-barrel-per-day refinery and a 1,471-hectare free trade zone in Ondo State.

Before this project, Algeria’s Skikda Refinery, with a capacity of about 356,500 barrels per day, held the title of Africa’s second-largest refinery. Once the Ondo refinery becomes operational, it will dethrone Skikda to take that position, making Nigeria home to both the largest and second-largest refining facilities on the continent.

The mega project, spearheaded by Backbone Infrastructure Nigeria Limited (BINL) in partnership with NEFEX Holdings Limited of Canada, represents one of the largest private-sector energy investments in West Africa and is poised to become Africa’s second-largest refinery after the 650,000-barrel-per-day Dangote Refinery in Lagos.

A new phase in Africa’s refining story

According to a statement issued by the firm, the funding followed the execution of a memorandum of understanding (MoU) between BINL and the Ondo State government through the Ondo State Investment Promotion Agency (ONDIPA).

BINL chairman Ken Nnamani led the firm’s leadership team on a courtesy visit to Governor Lucky Aiyedatiwa, where discussions centered on the project’s potential to create thousands of jobs and attract complementary investments in logistics, storage, and distribution.

The establishment of the refineries mark a strategic reversal of a pattern where African countries have exported crude oil while importing petrol, diesel, and aviation fuel at premium costs BI Africa

BINL’s vice president for corporate services, Wale Adekola, explained that NEFEX Petroline, the project’s partner, brings extensive expertise from operations spanning the Middle East, Europe, and North America.

“NEFEX Petroline combines the advantages of a global network with deep local understanding,” Adekola said, emphasizing the venture’s long-term developmental impact.

Complementing Dangote and transforming Africa’s fuel market

The refinery is designed to supply refined petroleum products locally and across Africa, complementing Dangote’s existing capacity and strengthening Nigeria’s foothold as the continent’s energy hub.

Together, these two mega refineries could process more than 1.1 million barrels of crude per day, marking a transformative milestone for a continent that has long struggled with limited refining capacity and a heavy reliance on imported fuels.

This figure is projected to rise to nearly 2 million barrels per day once Dangote completes its planned expansion, which will boost the refinery’s capacity from 650,000 to 1.4 million barrels per day. This would cement Nigeria’s status as a global refining powerhouse and a central force in Africa’s energy transformation.

For decades, African countries have exported crude oil while importing petrol, diesel, and aviation fuel at premium costs, a paradox that has drained foreign reserves and exposed economies to global price shocks. Projects like Dangote’s and BINL’s mark a strategic reversal of this pattern.

By boosting local refining output, Africa is gradually moving toward energy self-sufficiency, aiming to supply its own markets and export refined products across the continent.