Economy

Buhari Flag-Offs $2.8bn Ajaokuta-Kaduna-Kano Gas Pipeline Project

Amidst the global pandemic, President Muhammadu Buhari, on Tuesday, June 30, 2020, flagged off the landmark construction of the $2.8bn, 40 inches by 614km Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project from the State House, Abuja.

In a notice to the Nigerian Stock Exchange (NSE), the management of Oando Plc said it attended the virtual ceremony as a consortium partner in the project, which according to President Buhari will facilitate the development of new industries.

Another importance of the project, he said, is that it will revive moribund industries in northern Nigeria, while fostering the development and utilization of local skills and man power, promote technology transfer, local manufacturing as well as create balanced development and further integrate the country.

When completed, the 614km Ajaokuta-Kaduna-Kano natural gas pipeline, he tweeted via his personal handle, “will push Nigeria’s power generation capacity to more than 10,000MW as the three new captive gas-fired plants, to be located in Abuja, Kaduna and Kano, are expected to deliver 3,600MW of power.”

He challenged the private sector to lead in maximizing the country’s gas resources to create a petrochemical hub that will resurrect, not only the manufacturing capacity but place the country on the part to increased self-sufficiency.

Recall that at the end of an extensive due diligence and bid process, a two-party consortium consisting of Oilserv Limited and Oando Plc (Oilserv-Oando Plc consortium), was awarded the Engineering, Procurement, and Construction (EPC) mandate for segment 1. This accounted for 40” by 303.4km linear pipeline system for the Ajaokuta to Kaduna portion of the AKK Pipeline Project by the Nigerian National Petroleum Corporation (NNPC) on April 19, 2018. 

The AKK Pipeline Project, with a 24-month timeline, will originate from Ajaokuta in Kogi state, traversing Abuja, Niger and Kaduna states, before terminating in Kano state. It is the largest gas pipeline project in Nigeria’s history, with a 614km section of the Trans-Nigeria Gas Pipeline (TNGP) with the capacity to transport about 2.2bn cubic feet of gas per day.

A statement by Oando Plc explained that the project will boost domestic utilization of natural gas for Nigeria’s social economic development when completed, will support the addition of 3,600 megawatts of power to the national grid and connect energy demand from the Northern Nigeria with supply from the South.

It will in the process enable power-starved communities across the Northern region to have greater access to electricity, besides providing stranded commercial and industrial customers with a cleaner, more efficient source of self-generated energy.

The project will enhance uptime at industrial clusters, enabling heavy duty plants in Northern parts of the country to return to internationally competitive operations, while significantly curbing gas flaring in the Niger Delta and guaranteeing better air quality in the oil producing region and preserving the ecosystem.

Commenting on the project, Group Chief Executive of Oando Plc, Jubril Adewale Tinubu, described as a proudly Nigerian company, focused on driving indigenous participation we have always been proponents of public private partnership in accelerating the actualization of the nation’s goals. 

“We have aspired to play an integral role in the building out of the National Gas Infrastructure and Pipeline Grid, as evidenced by our efforts in 2009, post the Nigerian Gas Masterplanwhen we participated in the unrealized Calabar- Ajaokuta- Abuja-Kano (CAAK) line.  We have developed strategic partnerships with both private sector players and the NNPC in bringing sustainable solutions to spur the development of the country via our numerous gas development and distribution projects. 

“We commend the NNPC for spearheading projects that will soften the headwinds occasioned by the global COVID-19 pandemic.  We are proud to be active participants in driving the country’s industrialization and actualization of the Gas Master Plan which will undoubtedly create employment opportunities and ultimately generate as well as enhance value for the nation,” the statement added.

Also speaking on the project, Oilserv said in a statement it will, according to the NNPC, “significantly curb gas flaring in the Niger Delta and guarantee better air quality in the oil producing region. Furthermore, the pipeline, which was conceived to connect demand from the northern part of the country with supply from the south, would be the biggest infrastructure development in the country’s recent history. It will also mark a significant shift in the nation’s energy policy; from revenue, targeted export programmes to development focused domestic supply programmes.”

For Malam Mele Kyari, Group Managing Director of the NNPC, the Buhari administration “has made it a priority to ensure revenues from oil and gas resources are utilised to support the emergence and growth of other non-oil sectors of the economy. Construction of these critical enablers is in line with NNPC’s responsibility of implementing the National Gas Infrastructure Blueprint which is part of the Nigerian Gas Master Plan. The master plan is meant to leverage on the nation’s huge natural gas reserve base to stimulate unprecedented economic growth and enable Nigeria’s migration from the current mono-economy into a diversified economy.”

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