The Nigerian National Petroleum Company Limited (NNPC) has spent $1.1 billion (about N506.6 billion) on the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, delivering 70 per cent of the trunk welding.
The Group Chief Executive Officer of NNPC Ltd, Mele Kyari, stated this on Monday while inspecting a section of the project at Ahoko Gbagyi village in Kogi State
The AKK project spans 614 kilometres with a 15km Abuja terminal gas station, four gas stations, 22 block valve stations, pigging stations among others. Through this facility, NNPC will transport 2 billion Standard Cubic Feet (scuf) of natural gas per day to three power plants in Abuja, Kaduna, Kano with 1,300 megawatts (MW) capacity; and to other gas-based industries and off-takers.
Kyari said the project is being funded solely by NNPC, assuring that gas would begin to flow through it by the end of the third quarter.
He said: “This project has not stopped for one day. We are continuing to fund it despite the fact that we do not have third party finance for this project. We have so far spent over $1.1 billion on this project from our cash flow.
“We are a very different company today; we are a commercial company; we have intercompany loans within our company. This company can fund this project, so we do not need any support to fund this project, we will deliver this project. We don’t owe a dollar to our contractors and we pay all their invoices and we have over 30 sites that are active today in this project,” Kyari explained.
The NNPC chief however noted some of the security challenges along the line route. “We have lost men and we are so sorry to their families. We continue to share their grief. But despite this, we’ve gotten massive support from our government security agencies.”
According to reports, there were claims that the project had been abandoned because the contract was allegedly inflated. However this claim could not be authenticated. What was clear during a visit by our correspondent was that construction work was ongoing.
AKK project reaches 70%, gas to flow Q3
Speaking on the project status, the GCEO of NNPC said it has reached 70% with gas transportation possible by September through the pipeline.
“We are delivering them in phases. 70% of all welding works have been completed. There are very many other components of this project. So, once we are able to complete the welding and put certain basic selection, we can actually flow gas into this line and other parts of the project will continue to be delivered.
“What this means is that this line will flow 2 billion scuff of gas and what this means is that, we are delivering 2bn scuff of gas every day in this line, powering industries, powering power plants, creating gas-based industry and this is the ultimate objective. By the third quarter of this year, we will complete the entire welding of this work and we can actually energize this line by the third quarter of this year,” stated Kyari.
Abuja power project begins soon
The NNPC head revealed that one of the power projects, which will be in Abuja, will take off soon. He said: “Our plan is to have 1,300MW power plants in Kaduna, Abuja and Kano. We are phasing that so that we deliver them as quickly as possible. Very soon, we are going to commence the construction of the Abuja power plant in earnest and it is a cumulative thing and there is a partnership with core investors on this.”
And speaking on the work at the Kaduna axis where security issues had worsened earlier, Kyari said, “There are 30 active sites on this line all the way to Kano.”
The Project Manager, Oilserv Limited, Steve Nnorom, said the company is handling over 250 kilometres of section of the project from Ajaokuta with over 200km of the pipeline welding completed. At the Bravo site in Ahoko village, Nnorom said Oilserve has 15 welding sites to speed up the process while Daily Trust observed that freshly dug trenches at a section around Abaji area of FCT to earth some already welded pipes.
Over 400km of line welding ready – Report
According to an NNPC update report obtained yesterday, the $2.8bn (about N1.289 trillion) project initially agreed in 2018 was renegotiated by NNPC in 2019 dropping to $2.5bn (about N1.151trn) with $300 million (about N138bn) savings before the Federal Executive Council gave its final approval.
The oil firm said it initiated financing discussions with the Bank of China to lead a consortium of Chinese banks in 2018. SINOSURE, the Chinese government insurance agency reviewed the project and advised the government to approve the funding. While that was ongoing, NNPC said it began pre-funding the project with the flag off of the construction by President Muhammadu Buhari on 30th June 2020.
It said since the flag off, the project has continued with overall engineering design at 93.48% while procurement has reached 88% for the two segments.
NNPC said 94% of the line pipes have been manufactured and 90% of them already delivered to Nigeria. “Construction activities on both segments are ongoing; we have completed 400km of the linear section/mainline welding, representing 68% of the Right of Way (RoW) from Ajaokuta in Kogi State to Kano,” it noted.
Other ongoing activities include special constructions like Direct Pipe Installation (DPI) across the River Niger in Kogi State and other Horizontal Directional Drilling (HDD) across River Robo, Pai and Shika River in Zaria, Kaduna. The rest are the field joint coating, trenching and lowering, temporary cathodic protection with plans to pre-commission some sections.