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$2.8bn Gas Pipeline Project To Power 3,600MW Plants – FG

The $2.8bn Ajaokuta-Kaduna-Kano natural gas pipeline project being constructed by the Federal Government through the Nigerian National Petroleum Company Limited and its partners, is now 43 per cent completed, the Vice President, Prof. Yemi Osinbajo, announced on Monday.

He also revealed that the project would help in generating 3.6 gigawatts (3,600 megawatts) of electricity, adding that the AKK pipeline was a major project of the regime of the President, Major General Muhammadu Buhari (retd.).

Osinbajo spoke at the opening ceremony of the 6th Nigeria International Energy Summit in Abuja. He was represented at the event by the Secretary to the Government of the Federation, Boss Mustapha.

Buhari inaugurated the AKK pipeline project in July 2020, where it was announced that the Bank of China and Sinosure, a Chinese export and credit insurance corporation, were to fund the $2.8bn facility.

Buhari had through a virtual conference, flagged-off the commencement of the construction work on the project at the Ajaokuta and Kaduna camp sites simultaneously.

Brentex/China Petroleum Pipeline Bureau-CPP Consortia and Oilserve/China First Highway Engineering Company-CFHEC Consortia were announced as the Engineering Procurement and Construction contractors for the contract.

Speaking on some of the accomplishments of the current government, which winds down in May, Osinbajo said the AKK project was one of the government’s giant strides, particularly in the oil and gas sector, and was 43 per cent completed.

He said, “We’ve made giant strides in infrastructure. We kick-started the $2.8bn Ajaokuta-Kaduna-Kano natural gas pipeline project. The AKK project will transport up to 3,500 million cubic feet of gas a day from various gas gathering projects.

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“It will help to generate 3.6 gigawatts of power and support gas based industries along the route when completed. At present, the 614km gas pipeline is 43 per cent completed.”

He also mentioned the revenue generated by the Federal Government from the 2020 Marginal Fields bid round that was concluded last year.

“We implemented the marginal fields bid round and saw to the conclusion of the process, which resulted in the award of Petroleum Prospective Licenses to 161 successful firms with the Federal Government raking in about N200bn, as well as $7m from the process,” the Vice President stated.

Marginal fields are smaller oil blocks developed by indigenous companies that have not been exploited in the last 10 years.

Osinbajo said the Buhari regime reinvigorated indigenous oil companies, following the massive divestments by International Oil Companies that were operating in Nigeria.

“We have also reinvigorated the private sector in the industry. We ensured an attractive framework for the indigenous companies to take advantage of divestments by international oil companies.

“This will ensure that the indigenous companies grew their capacities tremendously, as they are now accountable for about 30 per cent of national oil and gas production, as from just two per cent in 2010,” he stated.

In his speech, which was made available to our correspondent in Abuja, the Group Chief Executive Officer, NNPC Ltd, Mele Kyari, said oil and gas remained a significant component of the global energy mix.

“Therefore we are unlocking more opportunities across both the oil and gas value chain spanning from supply and infrastructure to the markets.

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“For instance, NNPC Ltd is actively supporting the Federal Government towards the realisation of key initiatives such as the Decade of Gas and the National Gas Expansion Programme,” Kyari stated.

He said the initiatives sought “to deepen natural gas utilisation as an alternative transportation fuel, virtual gas supply to off-pipeline grid gas customers and gas utilisation as feedstock for the development of gas-based industries.”

He added, “This is evident in the definite actions taken to utilise CNG and LNG (Compressed Natural Gas and Liquefied Natural Gas) to power vehicles, buildings and power plants.”

He said NNPC Ltd was also investing heavily in critical gas infrastructure such as the AKK gas pipeline and the OB3 gas interconnector to support five billion standard cubic feet/day of of domestic gas utilisation, including 5GW of power generation capacity by developing power plant projects along the AKK pipeline corridor and across the country.

“For the gas export market, the ongoing NLNG Train 7 will expand Nigeria’s LNG production capacity to about 30 million tonnes per annum. This is in addition to the planned Nigeria-Morocco and the Trans-Sahara Gas Pipeline projects which will supply gas to sub-regional African countries and subsequently Europe,” Kyari stated.

The oil firm’s boss said the company was deepening exploration activities of the nation’s frontier basins, as this was already yielding results such as the oil discovery in Kolmani, adding that “we are hopeful that the recent spud-in of the EBENYI – A in Nasarawa State will yield positive result as well.”

Source: Punch

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