Nigeria has inked a US $50bn consortium deal to develop a 500,000-barrel-per-day refinery and an accompanying 1,471-hectare free trade zone in Ondo State. The move aims to strengthen the country as Africa’s refining heavyweight.
The project is being driven by Backbone Infrastructure Nigeria Limited (BINL) in partnership with Canada-based NEFEX Holdings Limited, marking one of the most ambitious private energy investments in West Africa. The funding commitment follows the signing of a memorandum of understanding between BINL and the Ondo State government through the Ondo State Investment Promotion Agency (ONDIPA).
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Africa’s second-largest refinery
The new facility once completed will become Africa’s second-largest refinery, surpassing Algeria’s 356,500-barrel-per-day Skikda Refinery. It will rank just behind the 650,000-barrel-per-day Dangote Refinery in Lagos, placing both the continent’s largest and second-largest refineries within Nigeria.
Governor Lucky Aiyedatiwa, BINL chairman Ken Nnamani highlighted the project’s promise to generate thousands of jobs and spur new investments in logistics, storage, and distribution. BINL vice president for corporate services Wale Adekola noted that partner company NEFEX Petroline brings decades of international operational experience across the Middle East, Europe, and North America. He said the joint venture blends global technical expertise with local knowledge to deliver long-term economic impact.
Designed to serve both domestic and regional markets, the refinery will supply a wide range of refined products and operate alongside the Dangote plant to deepen Nigeria’s role as the continent’s energy hub.
Together, the two mega refineries are expected to process over 1.1 million barrels of crude per day, a major leap for a continent that has historically depended on imported fuel despite being a major crude producer. The combined capacity could rise to nearly 2 million barrels per day if Dangote implements its planned expansion to 1.4 million barrels per day, further solidifying Nigeria’s status as a global refining center.
For decades, many African countries exported crude oil only to re-import petrol, diesel, and aviation fuel at high costs an imbalance that put pressure on foreign reserves and increased exposure to international price volatility. The emergence of large-scale refining projects such as those led by Dangote and BINL signals a decisive shift toward energy self-sufficiency, with Africa aiming to meet its own fuel demand and grow exports of refined products.