The Nigerian National Petroleum Corporation (NNPC) said it is close to wrapping up funding arrangements on the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project.
Group Managing Director of NNPC, Dr. Maikanti Baru, disclosed this on Tuesday while speaking at the Nigerian Day during the 30th edition of Gas Technology Conference in Barcelona, Spain.
e360 reported earlier this month that funding of the $2.8 billion AKK gas pipeline project have been guaranteed by China National Petroleum Corporation (CNPC).
The NNPC had in a statement informed that Chinese banks which include Industrial and Commercial Bank of China (ICBC), Bank of China, and Infrastructure Bank of China are expected to provide 85 percent of the financing, while Sinosure, China’s Export Credit Agency (ECA) will provide insurance cover.
The remaining 15percent will be provided by the project contractors which include Oilserve/Oando consortium, as well as Brentex/China Petroleum Pipeline (CPP) Bureau consortium, according to the statement by the NNPC.
The development was a fallout of the recently concluded Forum on China-Africa Cooperation (FOCAC) Summit in Beijing, China.
Meanwhile, speaking Tuesday in Barcelona, Dr. Baru, who was represented by NNPC Chief Operating Officer, Gas & Power, Engr. Saidu Mohammed, said the corporation had gone far in negotiating the terms of funding as well as the best payback structure for the project.
The AKK gas pipeline is designed to enable gas connectivity between the East, West and North, which is currently inadequate. It would also enable gas supply and utilization to key commercial centres in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.
The GMD who didn’t give an exact time for the projects ground-breaking ceremony, simply said it was near.
The GMD described the coming of Train 7 of the Nigeria Liquefied Natural Gas (NLNG) as a “big bang” that would usher in new developments for Nigeria’s energy sector and expand the nation’s economy, adding that the project was also capable of unlocking new vistas for country’s LNG potentials.
Dr Baru said even if gas is used to generate as high as 40,000mw of electricity, Nigeria cannot consume out its gas resources in the next 50 years.
Established in 1989 to harness Nigeria’s vast natural gas resources and produce Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) for export, the NLNG is owned by the NNPC (49%), Shell (25.6%), Total (15%) and Eni (10.4%).
It currently has six trains in operation, while the Final Investment Decision (FID) on its Train 7 is expected to be taken in December 2018, a move that will increase the company’s production capacity from 22 million tonnes per annum (MTPA) to 30 MTPA.
Dr. Baru however, stated that beyond the LNG business, Nigeria was looking at other ways of marketing its enormous gas resources such as the establishment of a gas hub which would lead to the springing up of fertilizer, petrochemical and other gas-based industries in the Niger Delta and across the entire country.
The Gas Technology Conference (Gastech) is the world’s most significant meeting place for upstream, midstream and downstream natural gas and LNG professionals where over 30,000 of participants convene to do business.