Singapore, Asia’s primary oil hub, is set to receive its first shipment of low-sulfur straight-run fuel (LSSR) oil from Nigeria’s newly built Dangote Refinery this week, according to market and ship tracking data.
This marks a significant milestone for the recently commissioned refinery, which aims to address Asia’s structural shortage of low-sulfur fuel oil essential for refueling ships in Singapore, the world’s largest bunker hub.
The Dangote Refinery, which began operations in January following a $20 billion investment, boasts a refining capacity of 650,000 barrels of oil per day. Once it reaches full capacity, it will be the largest refinery in Africa and Europe. Data from Kpler and Vortexa indicates that the refinery has ramped up its LSSR exports, with the majority of shipments currently destined for America and Europe.
The Glencore-chartered vessel, Front Brage, is expected to arrive in Singapore on Wednesday, carrying a cargo of 124,000 metric tonnes (787,400 barrels) of LSSR. Market sources suggest that this shipment was redirected to Asia due to weaker demand in Europe. LSEG data shows that the east-west 0.5% LSFO spread for the front month remained above $40 per ton, reflecting the price difference between these regions.
Dangote’s LSSR shipments are typically priced against Rotterdam’s 0.5% LSFO quotations on a free-on-board basis, though the specific pricing differential for this shipment was not disclosed. Another LSSR shipment of approximately 157,000 tonnes from the Dangote Refinery is expected to arrive in Singapore on the vessel Stena Suède in July.
LSSR can be blended with other fuels to create LSFO for bunkering or used as a feedstock in various refinery processes. Dangote began issuing tenders for the export sale of oil products in February, and since December, it has been⬤
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Reporting by Joshua Chinonye in Lagos, Nigeria.
