Wither the $12.8bn Legacy Ajaokuta-Kaduna-Kano Pipeline Project?
………As Delivery Deadline Elapsed
Observers in the oil and gas sector have noted that the orchestrated Ajaokuta-Kaduna-Kano (AKK) pipeline project failed to be delivered at appointed time, June 2020.
According to Proshare Analysts, a section of operators in the industry have identified lack of funding and insecurity as the major reasons the abandonment of the US$2.8billion AKK pipeline project was not delivered as scheduled.
The 614km pipeline was meant to connect eastern, western, and northern Nigeria into a network of pipelines and further target markets in the Trans-Sahara and Europe.
The popular thinking was that Nigeria would leverage the US$5billion funding commitment of the African Export-Import Bank (Afreximbank) to the NNPC earlier this year to fund alternative projects such as the Trans-Sahara Gas Pipelines (TSGP) to scale investment in the oil and gas industry in Nigeria and to harness the renewed interest of the European Union for Nigeria gas export to the Union.
If this will ever happen, it is something to hope for, Mr. Ijioma Hanson, an Abuja based engineer told Orient Energy Review last Friday in an interview. He expressed little surprise that the KKK pipeline project failed given the radical interruptions in pipeline oil flow, oil theft massive corruption in the system in Nigeria
The Ajaokuta-Kaduna-Kano (AKK) pipeline is a 614km-long natural gas pipeline being developed by the erstwhile Nigerian National Petroleum Corporation (NNPC). It is designed to run from Ajaokuta to Kano in Nigeria.
Estimated to cost $2.8billion, the pipeline project forms phase one of the Trans-Nigeria Gas Pipeline (TNGP) project. It is being implemented via a build and transfer (BT) public-private partnership (PPP) model, which involves the contractor providing 100% of the funding.
The project is being funded by the Bank of China and Sinosure, while the Nigerian Fidelity Bank will support the project. Construction was commenced in July 2020 with commissioning scheduled for June 2022.
The project will feature a diameter of 40in and is expected to transport 3,500 million metric standard cubic feet per day (Mmscfd) of dehydrated wet gas from several gas gathering projects located in southern Nigeria.
The project will result in the establishment of a connecting pipeline network between the eastern, western and northern regions of Nigeria. It also aims to create a steady and guaranteed gas supply network between the northern and southern parts of Nigeria by utilising the country’s widely available gas resources.
Very importantly, the development is expected to reduce the large volume of gas flared annually in Nigeria, as well as the subsequent environmental impact.
It will be recalled that the NNPC originally announced tenders for the development of the AKK pipeline in July 2013. A project proposal was submitted to the Infrastructure Concession Regulatory Commission (ICRC) in June 2017.
The PPP compliance certificate was also issued in July 2017 along with the approval of the feasibility study. The Federal Executive Council (FEC) granted approval for the project in December 2017.
The pipeline is slated to originate from Ajaokuta and pass through Abuja and Kaduna, before ending at a terminal gas station in Kano.
The project will be executed in three phases, with phase one covering the construction of a 200km-long segment between Ajaokuta and Abuja Terminal Gas Station at a cost of $855million.
Authorities said hase two will comprise a 193km-long section to be built between Abuja and Kaduna at a cost of approximately $835m. Phase three will involve the construction of a 221km-long section between the Kaduna terminal gas station (TGS) and Kano TGS. This section will cost an estimated $1.2billion to complete.
Other infrastructure planned for the development includes various associated valve stations, as well as intermediate and terminal facilities. The natural gas pipeline is expected to require the laying of approximately 51,200 steel line 40in-diameter pipes featuring a total combined weight of 240,768t.
Furthermore, the project will utilise 24in-diameter steel line pipes for spur lines, as well as 40in-diameter line break valves and future tie-in valves.
The engineering, procurement and construction (EPC) contract for phase one was awarded to OilServe/Oando consortium in April 2018. The Brentex/China Petroleum Pipeline Bureau (CPP) consortium was awarded the EPC contract for phase three.
As a matter of benefit, the AKK natural gas pipeline is intended to boost Nigeria’s electricity generation capacity by adding 3,600MW of power to the national grid and provide electricity in the northern part of the country with supply from the south.
It is also expected to strengthen Nigeria’s industrial sector within it eastern and northern regions. The project is also expected to promote and increase the local usage of domestic gas and will significantly control gas flaring in Niger Delta.
The AKK pipeline project forms part of the TNGP development, which is included in the gas infrastructure blueprint of Nigeria.
The 1,300km-long Trans-Nigeria gas pipeline will have three sections featuring varying diameters between 36in and 40in. It is slated to be the single biggest gas pipeline project to be executed in the history of Nigeria.
The first section of the TNGP is the AKK pipeline, which will connect Ajaokuta with Kano. The second section will link the Qua lboe terminal with Cawthorne Channel/Alakiri. It will also comprise a metering station, which is to be constructed in Obiafu / Obrikom.
The third section of the TNGP will be laid between the Obigo gas compressor station and the Ajaokuta node. The TNGP has been designed to transport between 11 and 24 million metric cubic meters per day (Mm³/d) of natural gas and will form part of the Trans Sahara Gas Pipeline (TSGP) system.