Abuja — Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, Tuesday, disclosed that the Ajaokuta-Kaduna-Kano (AKK) gas pipeline would be financed with loans from the Bank of China and Sinosure.
Speaking at the virtual flag-off of the construction of the AKK Gas pipeline at the Ajaokuta and Kaduna camp sites simultaneously, Kyari stated that all the required conditions precedent for closing the debt financing for the project had been provided.
Kyari stated that the process of obtaining internal approvals by the lenders was in progress to enable financing close by August 2020.
He added that the loan would be repaid through the pipeline transmission tariff and through the support of a sovereign guarantee.
He said, “The EPC contract for the 614 kilometers AKK gas pipeline project was awarded at a total contract sum of US$2.592 billion to Messrs. Oilserv Plc/China First Highway Engineering Company (Oilserv/CFHEC Consortium) for the first segment covering 303km and Messrs. Brentex Petroleum Services/China Petroleum Pipeline Bureau (Brentex/CPP Consortium) for the second segment covering 311km under a debt-equity financing model with loan from Bank of China and SINOSURE, to be repaid through the pipeline transmission tariff and supported by a sovereign guarantee.”
As part of the agreement, Kyari noted that the NNPC was utilizing the equity contribution to commence execution of the project to recover lost time and put the project back on track.
He expressed confidence that the EPC contractors would deliver the project on time, within budget and to quality/specifications.
Upon completion, Kyari noted that the project would enable the injection of 2.2 billion standard cubic feet per day (bscf/d) of gas into the domestic market and facilitate additional power generation capacity of 3,600 megawatts (MW).
Kyari further highlighted that the AKK gas pipeline project, which is part of the Trans-Nigeria gas pipeline project, involved the establishment of a connecting gas pipeline network that would integrate the Northern region of the country with the Niger Delta, Eastern and Western regions of the country.
He said: “The realization of this project will therefore bring about the needed transformation in power generation and industrial growth in the country.”