21 April 2018, Sweetcrude, Lagos — The Nigerian National Petroleum Corporation, NNPC has awarded the Engineering, Procurement, Construction (EPC) mandate for the US$727million Ajaokuta – Abuja portion (Lot 1) of the Ajaokuta-Kaduna-Kano Pipeline system, AKK Pipeline, to Oando PLC’s midstream affiliate, Axxela Limited formerly known as Oando Gas & Power, and Oilserv Limited.
The contract was awarded following a submission by Oando and Oilserv in 2013 in response to an expression of interest for a contractor-financed EPC development of the AKK Pipeline Project.
Commenting on the newly signed deal, Oando’s Group Chief Executive and Axxela Chairman, Jubril Adewale Tinubu, said: “Our long-standing achievements and aspirations in the gas and power sector are a testament to our desire to continuously provide innovative and integrated energy solutions across sub-Saharan Africa. The award of the Ajaokuta – Abuja portion of the AKK Pipeline Project also underscores our position as the partner of choice for investors, regulators, and key stakeholders as gas continue to gain prominence as a key driver for the region’s economic empowerment.”
The US$727million Ajaokuta-Abuja Pipeline development is a 215km gas infrastructure with associated facilities such as metering/terminal gas station, pigging station, block valve stations etc.
The development of the AKK grid is a manifestation of the gas infrastructure blueprint in the Nigerian Gas Master Plan, which seeks to extend the existing gas transmission network and achieve connectivity between the East (gas reserves) and the North (demand centres); serve new customers in the Northern regions; and bridge the shortfall in the Western region.
“As forerunners in the sector, we remain actively committed to the long-term realisation of the Nigerian Gas Master Plan. The development of critical gas pipeline infrastructure and a far-reaching national grid remains pivotal to the country’s industrialization and economic empowerment. Consequently, the implementation of the AKK Pipeline Project will enable power-starved communities across the northern region have greater access to electricity, while providing stranded commercial and industrial customers with a cleaner and more efficient source of energy,” Axxela CEO, Bolaji Osunsanya, said while commenting on the contract.
In a bid to aggressively expand its operational footprint and further create value-adding opportunities in the gas and power space, Oando divested a portion of its erstwhile midstream vehicle, Oando Gas & Power to Helios Investment Partners LLP (“Helios”), a premier Africa-focused private investment firm.
Oando Gas & Power subsequently rebranded as Axxela.
The company also exports gas to neighbouring countries such as Benin, Togo, and Ghana with a target to deliver over 100 million standard cubic feet per day (“mmscf/d”) via its newly acquired shipper status on the West Africa Gas Pipeline to fuel power plants, commercial entities, and residential homes.
According to NNPC, awards for the three lots on the AKK Pipeline Project were made to three selected consortia to facilitate a timely delivery of the gas network.