NNPC, CONSORTIUMS SIGN CONTRACT TO BUILD $2.8BN AJAOKUTA-KANO GAS LINE
NNPC,
CONSORTIUMS SIGN CONTRACT TO BUILD $2.8BN AJAOKUTA-KANO GAS LINE
The
Nigerian National Petroleum Corporation (NNPC) yesterday disclosed that it had
signed the engineering; procurement; construction; commissioning and financing
agreements for Lots 1 and 3 of the 40 inches by 614 kilometres long
Ajaokuta-Kaduna-Kano (AKK) gas pipeline and stations with a consortium
comprising of Nigerian and Chinese companies.
It
stated that the agreements signed were for a 100 per cent contractor financing
model for the project which is expected to cost $2.8 billion to build.
A
statement from the Group General Manager, Public Affairs of the NNPC, Mr. Ndu
Ughamadu, in Abuja, stated that under the terms of the contract, Lot 1 with
total length of 40 inches by 200 kilometres, stretching from Ajaokuta to Abuja
terminal gas station was awarded to a consortium formed by OilServe and Oando
Plc.
It
explained that Lot 3 which runs from Kaduna terminal gas station all the way to
Kano terminal gas station with a total length of 40 inches by 221 kilometres
was awarded to the Brentex/China Petroleum Pipeline Bureau (CPP) Consortium.
NNPC
stated that it envisaged that the contract agreement for Lot 2 which covers 40
inches by 193 kilometres, and stretching from Abuja to Kaduna would be executed
in the weeks ahead.
The
statement quoted its Group Managing Director, Dr. Maikanti Baru, to have said
at the contract signing ceremony that the AKK gas pipeline was a section of the
Trans-Nigerian Gas Pipeline under the gas infrastructure blueprint designed to
enable the industrialisation of the eastern and northern parts of Nigeria.
The
project, Baru noted, would also enable connectivity between the east, west and
north, which is currently non-existent.
He
stated that the AKK section had suffered setbacks due to scarce resources for
government to fully finance the project, hence the adoption of the contractor
financing model.
According
to him: “The two other pipelines, the OB3 and ELPs 2 in the gas master plan
blueprint, are currently at various stages of completion and are being financed
directly by the federal government.”
Similarly,
the statement quoted Mr. Emeka Okwuosa, Chairman of Oilserve Limited, to have
on behalf of the Oilserve/Oando Consortium, expressed gratitude to the
government and NNPC for providing the opportunities for indigenous companies to
flourish in the oil sector.
Okwuosa
reportedly said the decision to award Lot 1 of the AKK project to an indigenous
consortium spoke volume of government’s resolve to grow and encourage the
attainment of the ideals of the country’s local content law.
Also,
for the Brentex-CPP Consortium, Mr. Abubakar Nuhu, who is the Vice- Chairman of
Brentex Nigeria Limited, reportedly said that the consortium would rely mainly
on the acclaimed pedigree and global expertise of CPP in pipeline construction
to deliver a world class project.
NNPC
explained that the process for the award of the AKK project started in July
2013t, with the advertisement for tenders published by it in major national
newspapers.
It
added that after a painstaking technical and commercial evaluation process, the
Federal Executive Council (FEC) on December 13, 2017 approved the contract
valued at over $2.8 billion.
Meanwhile,
the Department of Petroleum Resources (DPR) has given the nod for the
commencement of construction of the 12 million standard cubic feet per day
(mmscf/d) capacity Liquefied Petroleum Gas (LPG) extraction plant at Ikuru area
of Rivers State, by Green Energy International Ltd.
Green
Energy is the Operator of the Otakikpo marginal field in Oil Mining License
(OML) 11. It stated that the DPR’s approval to construct (ATC) for the
12mmscf/d capacity LPG extraction plant was issued to it following its
successful submission of the detailed engineering design of the plant which
licence to establish (LTE) was issued in 2017.
According
to the Director Legal and Corporate Matters of Green Energy, Mr. Olusegun
Ilori, the engineering design was produced under supervision of the indigenous
operator by the contractors – PCC-LAMBDA Consortium, formed between Nigeria
indigenous companies and a Chinese company -Peiyang Chemical Equipment Co. Ltd
(PCC).
Ilori
noted that PCC was the original equipment manufacturer (OEM) for the plant, and
would be responsible for manufacturing and design activities associated with
the project.
He
stated that the company which began oil production in February 2017, was
determined to ensure full utilisation of the gas produced from the field for
LPG and power generation amongst other projects.
According
to him: “The gas utilisation plant involves the use of the lean gas to power
the 12o megawatts (MW) gas generator at Otakikpo field out of which 5MW would
be dedicated to the host communities in line with its MoU with the government
while the LPG and propane would be bottled and sold.
“Part
of the LPG shall be for domestic use within Otakikpo communities in order to
support small scale industries to stimulate the economy of the Niger Delta.”
Ilori
further said: “The company appreciates the support of the DPR in ensuring
prompt approval as it serves as booster for the company’s effort to fulfill its
obligations as a pilot project approved by government for zero gas flares
operation in the Niger Delta.
“The
LPG plant which is expected to be completed within the 12 months schedule would
be a booster for Nigeria’s drive toward utilisation of gas resources for
domestic gas. The company recently delivered 6MW gas generator to the community
while the other batches will arrive in the year.”