Over $1.1bn released for AKK Gas Pipeline Project — NNPC
Contrary to reports citing funding constraints, the $2.8billion Abuja-Kaduna-Kano gas pipeline project has been scheduled to start producing gas along that corridor within the third quarter of this year as work has reached 70 per cent at the project site
This is just as the Nigerian National Petroleum Company Ltd said that it has so far released the sum of $1.1billion to finance the project which is considered a critical component of the Federal Government gas master plan initiative.
The Group Chief Executive Officer, NNPC LTD, Mele Kyari gave the figure on Monday during an interview with journalists at an inspection tour of one of the project sites located in Ahoko, Kogi State.
The AKK 614 kilometers gas project has been in the plan for decades with Tenders issued by NNPC in July 2013 and approval granted by the Federal Executive Council in December 2017. The construction only commenced in July 2020.
But a national newspaper (Not Nigerian NewsDirect) had reported that financiers of the AKK pipeline project have pulled out of the project, citing alleged 570 per cent inflated contract sum, far above global threshold.
The paper had also claimed in the report that the project has been stalled, as there is no funding to cover cost of the second and third legs from Abuja to Kaduna and Kaduna to Kano due to funding constraints.
But speaking shortly after inspecting the project, the NNPC Boss said that work has not stopped as a result of funding constraint since the project commenced.
He said being a critical infrastructure project for the Nigerian energy sector, the NNPC has been meeting all its funding obligations to the contractors.
He said, “First of all we are here to thank our crew, our contractors, our staff who are doing everything possible to deliver this project and we are most grateful to them and we appreciate the great work they are doing.
“For the benefit of the Nigerian public, this is one of the most massive project that we’ll run in the company, it is of immense proportion of value to our country and to the socio-economic growth of our country.
“We know that this is a must deliver project. This project has not stopped for one day. We have continued to fund it despite the fact that we do not have third-party financing for the project.
“We have so far spent over $1.1billion on this project from our cashflow. We are a very different company today. We are a commercial company. We have inter-company laws within our company now. This company can fund this project, so we do not need any support on this project to deliver this project now.
“As we speak now, we don’t owe a dollar to our contractors today. We paid all their invoices, there are over 30 sites that are active today in this project, and we are very hopeful that we will deliver this project.”
He commiserated with the families of workers that have died as a result of the security challenges at the project site and added that the government is committed to ensuring that it does all it can to provide more security personnel at the project site to guarantee th timely delivery of the gas project.
Responding to a question if the project was actually stalled as a result of funding challenges, Kyari explained that such has never happened.
He said the NNPC has what it takes to fund the project till completion, noting that no amount is currently being owed based on the quantum of jobs delivered by the contractor
He added, “Yes, there are challenges like security issues. We have lost men, and we are so sorry to their families. We will continue to share their grief. But despite this, we have gotten massive support from our government security agencies; the Nigerian army, the Department of State Security Service and all other government agencies to make sure that our workers work firmly and we are also able to continue this project uninterrupted.
“I’m most grateful to this team, and we assure Nigerians that this project will be different and be delivered.
“This is a very massive project. We are delivering them in phases. First of all, the line welding has been completed by 70 per cent. There are many other components of this project and once you are able to complete the welding and put certain basic selection, you can actually flow casting to these lines and as other part of the project is continuous to be delivered.”
On the implications of the gas project for Nigeria’s gas supplies, the NNPC Boss added that it would boost electricity generation to the power sector and increase power to industries.
He added, “What this means for Nigeria’s gas supply is that these lines will flow 2 billion scf of gas. What this means is that you are delivering 2 billion scf of gas every day to this lines, power industry, powering gas plants, creating gas based industries and this is the ultimate objective.
“By the third quarter of this year, we will complete the entire welding of this work and what it means is that we can actually energise these lines by the end of the third quarter of this year.”
On how many megawatts of electricity will the gas project deliver, he said, “It depends of the capacity of the power plants that will be installed on the pipeline. Our plan is to have 1300 megawatts power plants in Abuja, Kaduna, and in Kano.
“As we speak now, we are facing that so that we deliver them as quickly as possible and by God’s grace very soon, we are going to face the construction of the Kaduna-Abuja power plant in earnest and of course it is a speculative thing but gradually we will build up to that capacity. Their is a financing partnership with core investors on this.”
When asked what his response will be to those who do not believe in the NNPC’s ability to deliver the project in a timely manner, Kyari replied, “What I will say is that we will shame them. This project will be delivered, we are not scared of their comments.
“We will deliver this project and the criticism is just typical of our country’s typical reaction when things are going well.”
Also speaking at the inspection site, the Project Manager, Steve Nnorom hailed the NNPC management for ensuring that all the resources needed for the speedy delivery of the project is provided.
He added that just last week, through the NNPC’s intervention, over 40 military personnel were deployed to beef up security at the project site.
When asked if the contractor is being owed, he said the NNPC is meeting up with all its obligation to the project and that no amount is currently outstanding for the job delivered.
