Nigeria awards $949m gas pipeline project to Chinese firm

The Nigerian National Petroleum Corporation (NNPC) has awarded the Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline project to a consortium of Chinese firms led by the Chinese Petroleum Engineering at the cost of $949 million representing 80 percent of cost of construction.

 

NNPC says the objective of the pipeline is to address the current operational challenges experienced in the Nigeria power sector limiting the ability of gas generation companies (Gencos) from increasing their output to due to difficulty transporting gas from the Niger Delta to power plants around the country.

 

In March this year, Maikanti Baru, group managing director of the NNPC said the process for the construction of the 650 kilometres northern gas pipeline that would run from Ajaokuta in Kogi State to Kano had begun.

 

“The Ajaokuta-Abuja-Kaduna-Kano pipeline is currently on tender. This project would soon be awarded under a contractor-financing scheme. The pipeline is a typical example of public private partnership and it is being tendered and would be funded by partners who would recover their investments from the operations of the pipeline,” said Baru at a lecture in Oloibiri.

 

According to the award letter, the consortium will assume the design, procurement, construction and transportation of the Kaduna-Kano pipeline.

 

“Among them, the proportion of the Company (contribution) in the construction sector is 80%, (which) is expected to about US$949 million,” said a statement by China Petroleum Group Engineering Co., Ltd. Board of Directors

 

“It will include a 40-inch pipeline 221 km, 2 stations and 7 valve room and its ancillary facilities, the project duration to the final signing agreement (will) prevail,”stated the release.

 

According to the project tender, the pipeline is expected to run 187 kilometres from Ajaokuta to Abuja, 193 kilometres from Abuja to Kaduna, 65 kilometres from Kaduna to Zaria and then the rest from Zaria to Kano.

 

NNPC also has ongoing gas pipelines projects that are at various stages of completion, including the strategic 127km East-West Obiafo/Obirikom to Oben (OB3) pipeline that is scheduled for completion by the end of this year, and the looping of the Escravos-Lagos Gas Pipeline System from Warri to Lagos, which is scheduled for completion by July also this year.