The AKK Gas Pipeline Project has Chinese imprint all over it. However, NNPC is providing the funds to kickstart it while the paperwork for the debt-for-equity construction model is hammered out.
Here are seven things that tell you all you need to know about the project:
- The Ajaokuta-Kaduna-Kano (AKK) project is designed to inject 2.2bscf/d of gas into the domestic market in addition to facilitating additional power generation capacity of 3,600MW.
- The EPC contract for the 614km AKK gas pipeline project was split into two and awarded to different companies, NNPC Managing Director, Malam Mele Kyari has said.
- Contract for the first segment covering 303km was awarded at a total contract sum of US$2.592 billion to Messrs. Oilserv Plc/China First Highway Engineering Company (Oilserv/CFHEC Consortium).
- Messrs. Brentex Petroleum Services/China Petroleum Pipeline Bureau (Brentex/CPP Consortium) got the contract for the second segment covering 311km.
- The Project is funded under a debt-equity financing model with loan from Bank of China and SINOSURE, to be repaid through the pipeline transmission tariff and supported by a sovereign guarantee.
- According to the NNPC GMD, Malam Mele Kyari, ”all required conditions precedent for closing the debt financing have been provided and the process of obtaining internal approvals by the Lenders is in progress to enable financing close by August 2020.”
- As part of the agreement, NNPC is utilizing equity contribution to commence execution of the project to recover lost time and put the project back on track.