Behind schedule AKK project gulps $1.1bn, as NNPC says pipeline nears 70% completion

Oredola Adeola

The Nigerian National Petroleum Company Limited (NNPCL) said that the sum of $1.1bn has been released to finance the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project which is presently near 70 percent completion.

Mele Kyari, NNPCL Group Chief Executive Officer (GCEO) made this known during an inspection tour of one of the project sites located in Ahoko, Kogi State.

EnergyDay gathered that the 70 percent completion as at April 2023 comes short of the target set by the NNPCL, which had in 2022 indicated that the project will be completed in the first quarter of 2023(Q1,22).

Despite struggling to catch up with the completion date, which is already behind schedule, the NNPCL GCEO claimed that significant feats have been recorded with the AKK gas pipeline and stations project, insisting that the construction work is well on course to deliver on schedule.

Kyari further confirmed that the NNPCL has so far released the sum of $1.1bn to finance the project, out of $2.8 billion estimated to be spent on the project.

The GCEO NNPCL said, “The AKK Gas Pipeline is one massive project we are running as NNPC limited. It has immense value for Nigeria and its socio-economic growth. The project has not stopped for one day. We have continued to fund it despite the absence of third-party financing.

“We have so far spent over $1.1bn on this project from our cash flow. We are a commercial company today. We have inter-company laws within our company now. This company can fund this project, so we do not need any support to deliver this project now,” Mr Kyari said

“As we speak now, we don’t owe a dollar to our contractors today. We paid all their invoices. There are over 30 active sites today in this project, and we are very hopeful that we will deliver this project.”

He added that the overall engineering design for the linear section of the two segments of the project stands at 93.48 per cent.

“The overall procurement for the linear section for the two segments is at 88 per cent and 94 per cent of the total line pipes have been manufactured and 90 per cent are already in-country.

“Construction activities in both segments are ongoing. We have completed 400km of the linear section/mainline welding, representing 68 per cent of ROW from Ajaokuta in Kogi state to Kano,” the NNPCL GCEO said.

Kyari further confirmed that several special constructions like Direct Pipe Installation (DPI) have been carried out across the River Niger in Kogi State, adding that other Horizontal Directional Drillings (HDD) have also been executed across River Robo, Pai, and Shika Rivers in Zaria, Kaduna State.

“Several back-end activities have commenced including field joint coating, trenching and lowering, and temporary cathodic protection, and talks of pre-commissioning of some sections have equally commenced,” he said.

“For surveillance along the entire right of way to enable us to realise the aspiration of timely delivering the AKK Project for the benefit of all Nigerians,” Kyari said.

EnergyDay’s check showed that the AKK was a component of the Nigerian Gas master Plan (NGMC), a gas infrastructure blueprint, which was approved by the Federal Executive Council under late President Umaru Yar’Adua, in 2008.

The project later received serious attention in June 2020 under Muhammadu Buhari’s administration, when the Federal Executive Council awarded the Engineering Procurement and Construction Contract (EPC) in favour of Oilserv Plc Consortium & CFHEC for lot1, while Brentex Petroleum Services and China Pipeline Bureau (Brentex-CPP) got lot2.

The AKK project was expected to be completed within the period of 24 months with a defect liability period of 12 months.

The Scope of Work includes Engineering, Procurement, Construction, Installation, Testing, and Commissioning of a 40” x 614km class 600# pipeline system from Ajaokuta to Kano with associated intermediate and terminal facilities to supply natural gas to off-takers at Abuja, Niger, Kaduna, Kano, and Zaria environs and along the environs of the pipeline route.

The right of way for the proposed AKK gas pipeline was expected to run parallel to the existing Nigerian Pipelines and Storage Company’s 16 inch-crude oil and 12 inch- product pipelines wherever possible.

At completion, the AKK pipeline is expected to evacuate an average of two (2) billion standard cubic feet(scf) of liquified natural gas per day to three (3) proposed base independent power plants in Abuja (1350MW), Kaduna (900MW) and Kano (1350MW), with a view of feeding other gas-based industries as well as other identified and proposed commercial off-takers within the pipeline corridor.

It would be recalled that the 614km, AKK project is a segment of the Trans-Nigeria Gas Pipeline (TNGP) and the Trans-Saharan gas pipeline project.

AKK pipeline at completion, is expected to be fed from the existing domestic Infrastructure, which is being expanded by Escravos-Lagos Pipeline System II (ELPS II) and Obiafu-Obrikom 3 (OB3) gas pipeline(all under construction).