Dangote refinery: Court order rocks $16bn Kenya project

Dangote Group has said a Kenyan court order over a land dispute will not stop the planned ground-breaking ceremony for its proposed 700,000-barrel-per-day refinery in Lamu, although some activities at the site could be affected.

The Malindi Environment and Land Court ordered both sides in the dispute to maintain the existing “status quo” on the disputed land until a hearing scheduled for October 14.

The order, dated September 25 and made public on Monday, followed a lawsuit filed by 133 residents of Chandavai in Lamu County.

The residents claim the land earmarked for the refinery is part of their ancestral heritage and that their families have lived and farmed there for generations.

Dangote Group said the ruling did not cancel the ground-breaking ceremony but acknowledged that it could temporarily restrict activities at the proposed refinery site.

“The court has not halted the ground-breaking ceremony of the refinery at this stage,” the company said in a statement obtained by Reuters.

However, it added that activities at the site “may be affected” because both parties had been directed not to undertake activities until the case is heard on October 14.

The legal dispute comes as Dangote pushes ahead with plans for what would be one of Africa’s largest refinery projects.

Speaking at an investor event in Nairobi on Tuesday, Africa’s richest man, Aliko Dangote, expressed confidence that the project would proceed despite the court action.

He described the legal challenge as a normal part of doing business in Africa and said his company was prepared to deal with those seeking to disrupt the project.

The proposed Lamu refinery is expected to cost between $15 billion and $16 billion and is targeted for completion by 2030.

Dangote hopes the project will replicate the impact of his 700,000-barrel-per-day refinery near Lagos, Nigeria.

The Nigerian facility has helped reduce the country’s dependence on imported petroleum products and has increasingly positioned Nigeria as a fuel exporter.

The Kenyan project, however, faces a different operating environment. Kenya does not currently have commercial oil production, meaning the future refinery would depend heavily on securing reliable supplies of crude from elsewhere.

The land dispute therefore represents another hurdle for a project already facing questions over crude supply, infrastructure and financing.

Meanwhile, Dangote’s expansion into Kenya comes as the conglomerate seeks to strengthen its position across Africa’s energy sector. Earlier this month, the group launched an initial public offering for its Nigerian refinery, described as Africa’s largest-ever share sale.

The Lamu project would significantly expand Dangote’s refining ambitions beyond Nigeria and could reshape Kenya’s fuel market if as planned. For now, however, the company must balance its ambitious timetable with a legal dispute over the land on which the refinery is to be built.