Dangote Refinery, based in Nigeria, is poised to send its inaugural shipment of low-sulfur straight-run fuel oil (LSSR) to Singapore this week.
This move marks the refinery’s entry into the Asian market, establishing a new trade route. Singapore, a major global bunker hub, has consistently faced a shortage of low-sulfur fuel oil for ship refueling.
The Dangote refinery, which commenced operations in January following a $20 billion investment, boasts a daily processing capacity of up to 650,000 barrels of products. Once it reaches full capacity, it will become the largest refinery in both Africa and Europe.
Since March, the Dangote refinery has ramped up its LSSR exports, primarily shipping cargo to the Americas and Europe, as evidenced by ship tracking data from Kpler and Vortexa.
The first shipment bound for Asia is scheduled to arrive on Wednesday. The Glencore-chartered vessel, Front Brage, will deliver approximately 124,000 metric tons (equivalent to 787,400 barrels) of LSSR to Singapore.
Market sources indicate that the decision to redirect the cargo to Asia was driven by weaker demand in Europe. Data from LSEG reveals that the east-west spread for front-month 0.5 percent LSFO (reflecting the price difference between these regions) remained above $40 per ton this week.
Dangote’s LSSR cargoes are priced against Rotterdam’s 0.5 percent LSFO quotes on a free-on-board basis, although the specific pricing differential for this shipment was not disclosed by market sources.
In addition, another LSSR shipment from the Dangote refinery, totaling around 157,000 tons, is expected to reach Singapore in July aboard the vessel Stena Suede, based on ship tracking data.
LSSR is typically blended with other fuels to create low-sulfur fuel oil (LSFO) for bunkering or used as feedstock in various refinery processes.
Back in February, Dangote initiated oil product exports and began procuring crude oil, primarily from the Nigerian National Petroleum Company (NNPC) Ltd, starting in December 2023.
