The funding challenge facing the country has forced the Nigerian National Petroleum Corporation (NNPC) to resort to contractor-financing of its pipeline and other facilities development projects, e360 has learnt.
Group Managing Director of the NNPC Dr. Maikanti Baru, disclosed this Tuesday in Abuja while speaking at the Nigerian International Pipeline Technology and Security Conference (NIPITECS 2018).
Dr. Baru explained that the initiative was taken to get around the prevalent funding challenge in the country, noting that the contractor-financing has enabled the corporation to build the pipeline infrastructure within the Gas Master Plan as exemplified in the recent award of the Ajaokuta-Abuja-Kaduna-Kano (AKK) gas pipeline and all ongoing downstream pipeline infrastructure rehabilitation effort.
Represented at the event by Dr. Babatunde Adeniran, Chief Operating Officer, Ventures, Dr Baru affirmed that pipelines remained the cheapest way of moving products across any distance, noting however, that pipeline operation and construction in Nigeria had been an expensive undertaking.
He challenged members of the Pipeline Professionals Association of Nigeria (PLAN) and other stakeholders to proffer solutions that could lead to a dramatic change and expansion of pipeline business in Nigeria.
‘’The poser I will like the conference to address is: Is cost really an inhibitor or is it the security challenges or financial models that are not properly structured and above all how do we make the pipeline business a financially viable investment?’’ Baru queried.
“How do we build partnership with the required technical expertise to assemble new technology based-industries that are cheap to operate and can deliver products that are both locally and internationally marketable?” he further added.
He also wondered if Nigeria had a financially capable environment that could provide funds at rates that would be competitive and low enough to produce adequate returns.
He said the answer to these posers would enable NNPC restructure and develop policies that would encourage infrastructure development in the country.
Engr. Geoff Onuoha, Chairman of PLAN, in his response, assured that the pipeline professionals would not only pick up the gauntlet and tackle the challenge posed to the group by the NNPC GMD, but would continue to work with other stakeholders to ensure in-country viability of pipeline business.