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$2.5bn AKK gas pipeline project on course to deliver by Q3’23 – NNPCL

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The $2.5 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline and stations project is well on course to deliver on schedule by the third quarter of 2023 as the overall engineering design for the linear section of the two segments of the project is 93.48 percent completed, NNPCL has revealed.

The Nigerian National Petroleum Company Limited, (NNPCL) revealed this in a statement on Monday, stating that 94 percent of the total line pipes have been manufactured and 90 percent are already in-country.

“The Overall Procurement for the linear section for the two segments is at 88 percent, construction activities on both segments are ongoing; We have completed 400km of the linear section/mainline welding, representing 68 percent of ROW from Ajaokuta in Kogi State to Kano,” it stated.

Several special constructions like Direct Pipe Installation (DPI) across the River Niger in Kogi State and other Horizontal Directional Drilling (HDD) across River Robo, Pai and Shika River in Zaria, Kaduna State are ongoing while several back-end activities have commenced including field joint coating, trenching and lowering, temporary cathodic protection and talks of pre-commissioning of some sections have equally commenced.

NNPCL said the project’s procurement process was supervised by ICRC and endorsed by the Bureau for Public Procurement having complied with all regulatory requirements before the approval by the Federal Executive Council at the sum of $2.8 Billion in 2018.

“The current Management further renegotiated the project cost downwards to $2.5 Billion in 2019 with the attendant savings of US$300M, which culminated to the final approval by FEC,” it revealed.

NNPCL revealed that it pre-funded the project, which led to the flag-off of the Construction by the President on 30th June 2020, noting that till date, it has funded over $1.1Bn on the project and none of the project activities are abandoned as reported and we reassure all stakeholders that we have a line of sight to project delivery on schedule.

It added that discussions on financing commenced in 2018 with the Bank of China as the Mandated Lead Arranger, leading a consortium of interested Chinese banks, noting that all the banks secured credit approvals from their various boards to proceed with the deal, which led to the sign-off of the term sheet for the facility with the Bank of China.

“Following the execution of the Term Sheet, SINOSURE, the Chinese Government insurance agency in charge of international financing went through their review cycle and endorsed the facility to their Chinese Government body for approval.

The Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline and Stations Project is a flagship project that will further deepen the integration of the Northern region of the country with the Niger Delta, Eastern and Western regions of the Country.

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The Scope of Work for the AKK Project includes the construction of a 40″ × 614KM linear section from Ajaokuta in Kogi State traversing FCT, Niger and Kaduna States and terminating in Kano as well as 24″ × 15KM Spur Line to Abuja Terminal Gas Station.

“It also includes the construction of Four Terminal Gas Stations, 22 Block Valve Stations, Intermediate Pigging Stations with other ancillary facilities; the Pipeline has the capacity to transport two Billion Standard Cubic Feet of Natural Gas Per Day to three proposed Independent Power Plants in Abuja, Kaduna, Kano, and other Gas-Based Industries as well as other identified and proposed commercial off-takers along the entire pipeline route,” it stated.

According to NNPCL, the project has the potential of greartly improving the Nation’s Power Generation Capacity and the economy as a whole through Industrialization as well as other economic uses.