President Muhammadu Buhari says the 614km Ajaokuta-Kaduna-Kano (AKK) gas pipeline, when completed, will lead to the revival of moribund industries and the development of new ones.
In an address delivered on Tuesday during the flag-off ceremony for the construction of the pipeline, Buhari said the project is part of the delivery of the present administration’s Next Level Agenda for sustainable development, enhancement of economic prosperity and increase of the country’s infrastructure assets.
Yahaya Bello and Nasir el-Rufai, governors of Kogi and Kaduna state, flagged off the commencement of works at Ajaokuta and Rigachikun sites, while the president watched remotely via video-conference from the council chamber in Abuja.
“We promised the nation that we will expand the critical gas infrastructure in the country to promote the use of gas in the domestic market,” he said.
“These include the Escravos to Lagos Pipeline System – 2 (ELPS-2), Obiafu to Obrikom (OB3) pipeline and AKK.
“These projects are fundamental to our desire to industrialize and energize the entrepreneurial spirit that is ever-present in our population.”
Buhari said it will provide gas for power generation and the revival of moribund industries along with transit towns in Kogi, Abuja (FCT), Niger, Kaduna and Kano, he said, adding that the cascading effect and impact of the AKK, when operational, will be immeasurable.
He said the country has learnt invaluable lessons from the global COVID-19 pandemic and some oil-rich countries that have used their crude as a pathway to economic and industrial diversification.
“Gulf countries that have similar levels of gas reserves as Nigeria have a strategy centred around gas-industrialization as their foundation towards export diversification. This has to be our guiding principle as we seek to attract investment and create opportunities for our people.
“As the world evolves, we owe our people the responsibility to prepare them for what the future holds. We, therefore, must be bold and fearless and can no longer be incremental in our approach.
The president also used the occasion to challenge the private sector to lead the charge in maximising the nation’s gas resources.
He also commended the Chinese government; the financiers of the Bank of China and SINOSURE; and the two EPC contractors (Brentex/China Petroleum Pipeline Bureau-CPP Consortia and Oilserve/China First Highway Engineering Company-CFHEC Consortia) for their support to deliver the important project.
He also congratulated the ministry of petroleum resources, Nigerian National Petroleum Corporation (NNPC) and all other stakeholders on the occasion, commending the resilience of the team to deliver on the project despite the COVID-19 pandemic.
In his remarks, Mele Kyari, NNPC group managing director, explained that the AKK gas pipeline project, which is part of the Trans-Nigeria gas pipeline project, involves the establishment of a connecting gas pipeline network that will integrate the northern region of the country with the Niger Delta, eastern and western regions of the country.
He said the EPC contract for the 614km AKK gas pipeline project was awarded at a total contract sum of $2.592 billion to Oilserv Plc/China First Highway Engineering Company (Oilserv/CFHEC Consortium) for the first segment covering 303km.
Kyari also said Brentex Petroleum Services/China Petroleum Pipeline Bureau (Brentex/CPP Consortium) got the contract for the second segment covering 311km under a debt-equity financing model with a loan from Bank of China and SINOSURE, to be repaid through the pipeline transmission tariff and supported by a sovereign guarantee.
Kyari added 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.