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Published On: Wed, Jul 1st, 2020

Delivery of US$2.5bn AKK Project Will Create Jobs, Improve Power Generation – Buhari

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By Etuka Sunday

President Muhammadu Buhari has said that delivery of the 614km Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project is part of his Administration’s Next Level Agenda for sustainable development and economic prosperity of Nigeria.
The President, who stated this Tuesday while flagging off construction works on the AKK project via virtual link from the State House in Abuja to two locations in Ajaokuta in Kogi State and Rigachukun, Kaduna State, said when completed the project would provide gas for generation of power and feedstock for gas-based industries, and also facilitate the revival of moribund industries and the development of new ones along transit towns in Kogi State, Abuja (FCT), Niger State, Kaduna State and Kano State.
He noted that harnessing and commercializing the nation’s vast gas reserves was an enabler for rapid economic development and diversification of the economy, saying that this remained as a cardinal objective of his administration’s drive towards ensuring a stable, sustainable and more prosperous future for the citizenry.
The Group General Manager, Group Public Affairs Division, NNPC, Dr. Kennie Obateru in a statement quoted the President to have stated that the project would create numerous direct and indirect employment opportunities while fostering the development and utilization of local skills and manpower, technology transfer and promotion of local manufacturing.
“We promised the nation that we will expand the key critical gas infrastructure in the Country to promote the use of gas in the domestic market. These include the Escravos to Lagos Pipeline System – 2 (ELPS-2), Obiafu – Obrikom – Oben (OB3) pipeline and the AKK. I therefore directed NNPC to ensure that these critical projects are completed on time, within budget and specification”, he said.
He commended the NNPC and other stakeholders for bracing the odds of the prevailing COVID-19 pandemic to kick-start the construction phase of the project.
The President called on the Governors of Kogi, Niger, Kaduna and Kano States, as well as the Minister of the Federal Capital Territory, to provide the enabling environment and support for the project.
Earlier in his welcome address, the Group Managing Director of the NNPC, Mallam Mele Kyari, remarked that the event would not have been possible without the full and unflinching support of His Excellency, Mr. President Muhammadu Buhari, who has made it a priority to ensure that revenues from oil and gas resources are utilized to support the emergence and growth of other non-oil sectors of the economy.
He said NNPC was transitioning towards becoming an Integrated Energy Company to support His Excellency, Mr. President’s economic diversification efforts. One of such efforts is the expansion of the corporation’s domestic gas footprint with the delivery of the Trans-Nigeria Pipeline Project which includes the Escravos to Lagos Pipeline System (ELPS) 2, the Obiafu-Obrikom-Oben (OB3) gas pipeline and the Ajaokuta-Kaduna-Kano (AKK) gas pipeline.
He explained that the EPC contract for the 614km AKK gas pipeline
project was awarded at a total contract sum of US$2.592 billion to
Messrs. Oilserv Plc/China First Highway Engineering Company
(Oilserv/CFHEC Consortium) for the first segment covering 303km and
Messrs. Brentex Petroleum Services/China Petroleum Pipeline Bureau
(Brentex/CPP Consortium) for the second segment covering 311km under a
debt-equity financing model with loan from Bank of China and SINOSURE,
to be repaid through the pipeline transmission tariff and supported by
a sovereign guarantee.
The NNPC GMD informed that all the required conditions precedent for
closing the debt financing have been provided and the process of
obtaining internal approvals by the Lenders is in progress to enable
financing close by August 2020.
He disclosed that as part of the agreement, NNPC is utilizing the
equity contribution to commence execution of the project to recover
lost time and put the project back on track.
Kyari expressed confidence in the ability of the EPC contractors to
deliver the project on time, within budget and to specifications,
noting that upon completion, the project would enable the injection of
2.2bscf/d of gas into the domestic market and facilitate additional
power generation capacity of 3,600MW.
In his remarks, Governor of Kogi State, Alhaji Yahaya Bello, who
expressed gratitude to God for witnessing the flag-off of the
construction phase of the AKK project, said his administration has
sponsored many youths in the state to acquire skills in welding and
urged the contractors to gainfully engage them.
On his part, Governor of Kaduna State, Mallam Nasir el-Rufai, thanked
the NNPC, Ministry of Petroleum Resources, and other stakeholders for
ensuring the flag-off of the project, stressing that there was high
hope because of the enormous benefits the project would bring to the
state.

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