Everything to Know About Dangote’s Ksh2 Trillion Lamu Refinery

Aliko Dangote, in partnership with some of the East African Community (EAC) countries, are set to develop a Ksh2 trillion (about $15.5 billion) oil refinery in Lamu.

The planned refinery will have the capacity to process 700,000 barrels of crude oil per day and produce more than 100 million litres of fuel daily when operational.

Dangote has set a 40-month timeline for completing the project, with the investment expected to create up to 60,000 jobs across the refinery and industries linked to the development.

The project has attracted interest from other EAC countries, with Rwanda and Ethiopia among those eying a stake in the refinery.  Kenya has committed Ksh64.7 billion ($500 million) to secure a 10% stake in the refinery.

During the groundbreaking on September 30, Uganda’s President Yoweri Museveni also stated that his country would be supporting the refinery. However, details of the investment were not revealed.

Also Read: How Much Kenyans Will Need to Invest in Dangote IPO Through NSE 

Why Dangote Chose Lamu

According to the billionaire, the Kenyan coastal town offered the combination of water availability, sufficient sea depth and suitable land required for a project of the refinery’s scale.

Tanga in Tanzania had initially been considered as the preferred location, partly because of plans for the Uganda-Tanzania crude oil pipeline. The Dangote Group ultimately settled on Lamu.

What the Refinery Will Do

The planned refinery will process approximately 700,000 barrels of crude oil every day. Dangote has also said the facility will produce more than 100 million litres of fuel daily, while supplying products to the regional and international markets.

The project will not be limited to conventional fuel refining. According to information provided by the Dangote Group, the facility will also produce one million tonnes of polypropylene and manufacture base oil. The refinery is also expected to supply jet fuel to international markets.

60,000 Jobs & Training of 1,000 Locals

The project is expected to create up to 60,000 jobs, both directly and indirectly. Employment opportunities are expected to emerge not only within the refinery but also across the wider industrial ecosystem that will develop around it.

These could include opportunities in construction, engineering, transportation, logistics, marine services, manufacturing, technology and other support services.

Dangote Group also plans to establish a training school in Lamu to prepare 1,000 local residents for employment opportunities arising from the refinery and associated industries. The programme will target people with engineering degrees, diplomas and other relevant qualifications.

The training programme is expected to create a link between the skills available among local residents and the technical requirements of the refinery.

Also Read: Everything Kenyans Should Know About Dangote IPO

1,000MW Power Plant Planned

Kenya is also in discussions with Dangote to develop a 1,000MW Liquefied Natural Gas (LNG)-fired power plant linked to the refinery.

The electricity would supply the refinery, petrochemical complex and Lamu Special Economic Zone. Any surplus electricity could potentially be sold to Kenya Power.

President William Ruto's Economic Adviser, David Ndii, said the government expects the gas-fired electricity to be contracted at approximately Ksh5-6 per kilowatt-hour (4-5 US cents).

Dangote Refinery Legal Dispute

The Lamu refinery has faced opposition from residents over land acquisition and compensation. A group of 133 Chandavai residents filed a legal challenge against the project, seeking to stop construction activities on disputed land.

The residents claim their families have occupied, cultivated and developed the land for generations despite not holding formal title deeds.

They allege that government agents and heavy machinery entered the land in August 2024, destroying crops and property without prior notice or compensation.

The residents have asked the court to halt further construction and recognise their claimed interests in the disputed land.

The court, however, declined to pause the project and ordered the parties to maintain the status quo on the land until October 14.

Dangote has acknowledged that the project will face legal disputes. At the groundbreaking ceremony, he said he was not afraid of challenges or court action and warned those seeking to cause trouble around his investments that he was prepared to respond.

Dangote said the company had faced similar challenges before and understood that large projects would attract criticism and legal disputes.

Lamu Refinery Contractors 

Dangote Petroleum Refinery and Petrochemicals FZE selected Honeywell International Inc. for a Ksh38.91 billion ($300 million) contract to provide engineering services and technology for the planned Kenyan refinery.

Honeywell has previously worked with Dangote on the company's Nigerian refinery and its planned expansion.

Engineers India Limited (EIL) has also been appointed as the Project Management Consultant and Engineering, Procurement and Construction Management consultant for the Kenyan project.

EIL's contract is valued at more than Ksh58 billion ($450 million). The company previously worked with Dangote on the 650,000-barrel-per-day Nigerian refinery and its planned expansion.

Also Read: How Kenyans Can Invest in the Dangote Refinery IPO 

Dangote Plans Nairobi Securities Exchange Listing

Dangote has also indicated that the East African refinery could eventually be listed on the Nairobi Securities Exchange.

Speaking at an investors' event in Nairobi, he said the company was committing to having shares in the East African refinery traded on the NSE.

The move would potentially give Kenyan and regional investors an opportunity to own part of the large-scale energy project through the local capital markets.

Meanwhile, Kenyan investors could soon buy shares of the Dangote Petroleum Refinery in Nigeria for as little as Ksh490 through a proposed NSE vehicle awaiting regulatory approval. Renaissance Capital plans to issue Global Depository Receipts (GDRs), with Stanbic Bank as custodian. 

The offer, running from October 5 to 13, would allow investors to buy at least 10 shares. The IPO involves 4.1 billion shares, or 3% of Dangote Refinery in Nigeria, raising Ksh202 billion to double capacity to 1.4 million barrels daily.