China Approves $2.5bn AKK Gas Pipeline Loan To Nigeria, Says NNPC GMD

By Gina Bella

The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, on Tuesday 15 December, 2020, said that Bank of China has approved the $2.5bn loan request by the Nigerian Government, to finance construction of the Ajaokuta-Kaduna-Kano AKK gas transmission pipeline, which commenced in July this year.

Kyari, made this known to journalists during an inspection exercise of the AKK pipeline constructions ongoing at Ajaokuta in Kogi State.

In company of the Minister of Finance, Zainab Ahmed, the NNPC GMD further said that the loan which was was only 85 percent of the total project score, was presently available for disbursement. He also said that the remaining 15 percent was provided by the NNPC as equity from its resources to finance the national project.

Conspicuously, he stated that the AKK gas pipelines once completed, would reduce gas emissions into the environment, create new business opportunities, revive moribund industries and create massive wealth along transit towns in Kogi, Niger. Kaduna, Kano states and Abuja.

“We have to give a sovereign guarantee to the lender so that the loan is concluded. I am glad to say that the loan has been concluded and very soon, disbursement will start to the contractor. For now its $2.5 billion so nothing else will stop this project except the act of God.

“Payment plan is part of the loan. We will have a moratorium on this loan and as soon as the gas starts flowing this line, the revenue from that line and including existing revenue sales will be used to pay for that loan so we don’t have any issues around the payment.” He, said.

Expressing satisfaction with the work being done by OilServ Limited, the contractor handling first segment of the project, the GMD said, “We have not suffered any major loss of time since we started this project, our pipes are arriving on schedule, they already are in the port at Warri and we are moving them to site.

“Every thing is perfect and we see no fear whatsoever around getting this project completed on time and on schedule. We are in constant touch with this project on a daily basis, this project has not stopped for one day since we started.”

On securing the AKK gas pipelines from vandal attacks, he revealed that some measures were being put in place including deployment of best of technologies and the use of optic fibre lines, in order to aid immediate alert and prompt response to ensure the pipelines were duly protected.

Commending the steady progress recorded thus far despite what she described as a “slow down in economic activities,, the Minister of Finance, Zainab Ahmed, noted that the AKK gas pipeline project was already creating job opportunities, especially for the locals who work side by side the contractors on a daily basis.

“This is a very important national project, the contractor that is doing this segment one that we have seen is actually doing a very excellent and very quality job and we commend the NNPC for their foresight in pushing this project. I am happy that at least the guarantee that we have for this project is well justified.”

Chairman OilServ Limited, Emeka Okwuosa, said about 10 percent of the AKK project has so far been carried out. He stressed that the engagement of local content including materials and resources by the company was almost 100 percent.

“OilServ as a company is 100% representative of local content from engineering to procurement and production. Based on the fact the loans came from China, the line pipes had to come from China but apart from that, every other thing comes from Nigeria.

“Normally in this project you do engineering design, you go on with procurement of the materials and then proceed to construction but procurement will take time to happen because when you order pipes they have to mill it overseas and ship.

“The issued us with these pipelines that they have so we’ve started pre-construction work ahead of time. Its a process but as of now if you put it together, we are close to 10 percent of the entire project but it will speed up as soon as we have our line pipes.”

Making reference to the consistent support received from the NNPC, Okwuosa gave assurances that the AKK project would not only be delivered in line with the schedule, but in top quality.

“In this particular project, we have the utmost support of NNPC and that is why we are able to move at the pace we are moving. The GMD has taken this project as a pet project, sometimes we feel pressured but we understand what it means and the reasons for it.”

OilServ Construction Manager Operations and Technical, Chigozie Obi, disclosed that the company was the first to deploy the use of automatic and semi automatic wielding system in the country, as most pipeline companies use manual wielding systems.

He revealed that out of the construction of 15 kilometres line pipe wielding ongoing at the Ajaokuta axis, 13. 5 kilometres have been successfully completed, with assurances the remaining 1.5 kilometres would be completed within next week.

He further noted that with the arrival of the major line pipe from China, haulage was expected to commence within the holiday going into January, and that resumption of work would kick start a major construction work going forward.

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