Buhari Targets More Jobs, Technology Transfer With $2.8bn AKK Gas Pipeline
President Muhammadu Buhari yesterday inaugurated the $2.8 billion Abuja-Kaduna-Kano (AKK) Gas Pipeline Project, with disclosures that the contract would create jobs, enhance technology transfer and boost local manufacturing.
Sharing the president’s optimism, the Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Mallam Mele Kyari, said the project has the capacity to generate 3,600 megawatts of electricity.
The president pledged the federal government’s commitment to timely delivery of the project within budgetary allocation and specifications.
The president, who made this commitment at the virtual inauguration ceremony of the project at Ajaokuta, Kogi State and Rigachikun, Kaduna State camp sites simultaneously, said the project was strategic for Nigerians and hence, must succeed.
Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, in a statement, said the president charged NNPC and its partners to remain focused, describing the AKK project as part and parcel of the delivery of the present administration’s next level agenda for sustainable development, enhancement of economic prosperity and an increase in the country’s infrastructure assets.
Adesina said Governors Yahaya Bello of Kogi State and Nasir El-Rufai of Kaduna physically inaugurated the projects at both Ajaokuta and Rigachikun sites, while the president watched remotely via video-conference from the Council Chamber of the State House in Abuja.
‘‘We promised the nation that we will expand the critical gas infrastructure in the country to promote the use of gas in the domestic market. These include the Escravos to Lagos Pipeline System – 2 (ELPS-2), Obiafu to Obrikom (OB3) pipeline and AKK.
‘‘These projects are fundamental to our desire to industrialise and energise the entrepreneurial spirit that is ever present in our population,” Buhari said.
Adesina said the president highlighted the benefits of the project with a completion period of two years, saying it would provide gas for power generation and gas-based industries that would facilitate the development of new industries.
He also said the project would ensure the revival of moribund industries along transit towns in Kogi State, the Federal Capital Territory (FCT), Niger,Kaduna and Kano states, with the unquantifiable output when the project finally takes off.
‘‘It has significant job creation potential both direct and indirect, while fostering the development and utilization of local skills and manpower, technology transfer and promotion of local manufacturing,’’ the president said.
Buhari, who said Nigeria had learnt huge lessons from the global COVID-19 pandemic, disclosed that some oil-rich countries had used their crude oil as the platform for economic and industrial diversification.
The president described the pandemic as another justification for federal government’s pursuit of export substitution initiatives and projects meant to promote local manufacturing.
Buhari used the occasion to challenge the private sector to champion the efforts for optimal use of the nation’s gas resources, pointing out that the private sector has what it requires to create a petrochemical hub aimed at resurrecting the manufacturing industry and putting the country on the path of increased self-sufficiency.
He said: ‘‘As the world evolves, we owe our people the responsibility to prepare them for what the future holds. We, therefore, must be bold and fearless and can no longer be incremental in our approach.
‘‘Today marks an important chapter in the history of our great nation. It marks the day when our domestic natural gas pipeline networks, from Obiafu in Rivers State, Escravos in Delta State and Lekki in Lagos State, are being connected through Kaduna to Kano States thereby enhancing national energy security, creating balanced development, and further integrating our nation.”
Buhari appealed to the governors of Kogi, Niger, Kaduna and Kano states as well as the Minister of the Federal Capital Territory (FCT) to provide the enabling environment and support for the project.
Kyari, in his remarks, said the AKK gas pipeline project, which he described as part of the trans-Nigeria gas pipeline project, involved the establishment of a connecting gas pipeline network that would link the northern region of the country with the Niger Delta as well as the South-east and South-west.
Kyari disclosed that the EPC contract for 614-kilometre AKK gas pipeline project was awarded at the rate of $2.592 billion to Messrs. Oilserv Plc/China First Highway Engineering Company (Oilserv/CFHEC Consortium) for the first segment covering 303 kilometres.
Assuring that the contractor would live up to expectation, Kyari said upon completion, the project would result in the injection of 2.2bscf/d of gas into the domestic market and equally facilitate additional power generation capacity of 3,600 megawatts of electricity.
Meanwhile, banking on the commercial viability of the project, the lead contractor/Oilserv Limited, has expressed its readiness to deliver the project.
The Chairman of Oilserv and Head of the project’s consortium, Dr. Emeka Okwuosa, stated this while speaking with journalists at the virtual presidential inauguration of the project in Ajaokuta.
He said when completed and it comes on stream, the gas infrastructure would be able to generate fund for the repayment of the loan obtained for it earlier than the repayment date.
Okwuosa said: “As I said, this is fully viable. The facility being taken is meant to be repaid in 15 years, but this project can pay itself in less than 10 years because this is a commercial venture. When you pipe this gas, you have gas flowing through to industries, to power plants.
“There are tariffs to be paid to even transport this gas if you understand the mechanism of gas transportation. For every cubic metre of gas that passes by, there is an amount that is paid by those who use it.
“In addition to that, the gas itself that passes by would have to be paid for, to be used. So, this is a commercially viable project. It’s not the kind of project that the government has to support for it to be viable.”
According to him, “We are ready for it, in fact, what we are carrying out today is official flag-off which is the groundbreaking ceremony. But as you can see over there, we are ready. We are already working, we are laying the lines.”