Developed by the Nigerian National Petroleum Corporation (NNPC), the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project entails the construction of a 614km-long natural gas pipeline from the Ajaokuta terminal gas station (TGS) in the Kogi state in the southern region of Nigeria, through the Federal Capital Territory (FCT), Niger, and Kaduna, to terminate at a gas station in Kano.
The project, the cost of which is estimated at US$ 2.8bn, is being implemented in three phases, under a build and transfer (BT) public-private partnership (PPP) model, which involves the contractor providing 100% of the financing.
The first phase covers the section between Ajaokuta and Abuja, which is approximately 200 kilometers long and is budgeted to cost US$ 855M.
The second phase is from Abuja Gas Terminal to Kaduna Gas Terminal, a distance of 193 kilometers and its budget is US$ 835M, while the third and the final phase is from Kaduna to Kano, a distance of approximately 221 kilometers, and is estimated to cost US$ 1.2bn.
The natural gas pipeline project requires the laying of approximately 51,200 steel line 40in-diameter pipes featuring a total combined weight of 240,768t. The project will also utilize 24in-diameter steel line pipes for spur lines, as well as 40in-diameter line break valves and future tie-in valves.
Other infrastructures planned for the development include various associated valve stations, as well as intermediate and terminal facilities.
The Objective of the pipeline
The AKK gas pipeline will be supplied with up to 3,500 million cubic feet (mcf) of pipeline quality gas a day sourced from various gas gathering projects in the southern part of Nigeria, at a minimum pressure of 1,000 lb per square inch gauge (psig) at the Ajaokuta tie-in, and deliver it to Kano also at a minimum pressure of 1,000 psig.
The long-term target of the project is to supply gas to Europe through the Trans-Saharan Gas Pipeline (TSGP) project, which it forms phase one of. Upon completion, the TSGP will provide a golden opportunity for the West African country to exploit its gas potentials and utilize its gas resources to enable it to earn as much revenue from gas as it is earning from oil.
This will in turn enable the country to meet its nagging domestic gas utilization and eliminate its gas flaring, as well as meet global greenhouse gases/climate change policy requirements in the long run.
In July, the NNPC announced tenders for Ajaokuta-Kaduna-Kano (AKK) gas pipeline project.
In June, the NNPC submitted the proposal for the Ajaokuta–Kaduna–Kano (AKK) natural gas pipeline project to Infrastructure Concession Regulatory Commission (ICRC).
In July, the feasibility study for the project was approved and the PPP compliance certificate was issued.
In December, Nigeria’s Federal Executive Council (FEC) approved the pipeline project.
In April, a consortium of two local companies including Oando Plc and Oilserv was awarded the engineering, procurement, and construction (EPC) contract for the construction of the first phase (Ajaokuta-Abuja) of the pipeline.
In March, China Export and Credit Insurance Corporation (Sinosure) agreed to provide insurance cover for 85% of the total cost of the project (US$ 2,890,522,548.37), which will be borrowed from Chinese financial institutions to the sum of US$2,591,849,049.19.
The Nigerian Gas Company (NGC) a subsidiary of the NNPC, would provide equity financing worth US$ 434M, the equivalent of 15% of the total cost.
In July, the construction of the pipeline was launched with commissioning scheduled for 2022.
It was reported that the NNP, through the federal government of Nigeria, was seeking US$ 1bn from other lending organizations to continue working on the project after the Chinese lenders failed to disburse the pledged cash as expected.