The Nigerian National Petroleum Corporation says it is concluding negotiations on terms of funding and payback structure for the Ajaokuta-Kaduna-Kano gas pipeline project with Chinese lenders.
The Group Managing Director, NNPC, Dr Maikanti Baru, said this at the Nigerian Day during the 30th edition of the Gas Technology Conference in Barcelona, Spain, according to a statement made available to our correspondent in Abuja on Wednesday by the Group General Manager, Public Affairs Division of the corporation, Mr Ndu Ughamadu.
Baru, who was represented by the NNPC Chief Operating Officer, Gas and Power, Mr Saidu Mohammed, said the corporation had gone far in negotiating the terms of funding as well as the best payback structure for the project.
He explained that tremendous progress was recorded towards securing funding for the project during the last visit of President Muhammadu Buhari to Beijing, China.
The 40-inch x 614km AKK gas pipeline is expected to cost about $2.8bn.
While 85 per cent of the money is expected to be provided by the financiers, including Industrial and Commercial Bank of China, Bank of China and Infrastructure Bank of China with Sinosure, the remaining 15 per cent will be provided by the contractors, which include Oilserve/Oando consortium and Brentex/China Petroleum Pipeline Bureau consortium.
The AKK pipeline is designed to enable gas connectivity between the East, West and North, which is currently inadequate.
It will also enable gas supply and utilisation to key commercial centres in northern Nigeria, with the attendant positive spin-off on power generation and industrial growth.
The NNPC boss said the ground-breaking ceremony for the project was near, explaining that Nigeria was focused on expanding its critical gas infrastructure such as pipelines, which would lead to a gas grid covering the entire country.
“Once you have the whole nation covered with a gas grid, industries will naturally spring up along the way and litter the entire country. That is our target in the long run,” Baru stated.
He described the coming of Train 7 of the Nigeria LNG Limited 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 the country’s Liquefied Natural Gas potential.
Baru said NNPC had been looking forward to the Final Investment Decision on Train 7 in the last 10 years, adding that the wait would soon be over.
“We cannot consume out our gas resources in the next 50 years, even if we generate as high as 40,000 megawatts of power. We are happy that the NLNG is a credible company capable of competing in the international arena,” he noted.
Established in 1989 to harness Nigeria’s vast natural gas resources and produce LNG and Natural Gas Liquids for export, the NLNG is owned by the NNPC (49 per cent), Shell (25.6 per cent), Total (15 per cent) and Eni (10.4 per cent).
It currently has six trains in operation. The FID on the seventh train is expected to be taken in December, a move that will increase the company’s production capacity from 22 million tonnes per annum to 30 MTPA.
On his part, the Managing Director of the NLNG, Mr Tony Attah, described the Train 7 as the next big thing not only in Nigeria’s gas industry, but also in the global gas arena.