FG Set To Disburse $2.5bn For AKK Gas Project

L-R: The GMD, NNPC, Mr Mele Kyari, Minister of Finance, Budget and National Planning, Zainab Ahmed and DG, DMO, Patience Oniha at the inspection tour of AKK gas project in Ajeokuta, Kogi State.

…Commends NNPC, OilServ For High Quality Job

The Federal Government has concluded all necessary arrangements for the disbursement of funds ($2.5billion) for the construction of the 614km Ajeokuta-Kaduna-Kano (Akk) natural gas pipeline.

This was disclosed by the Minister of Finance, Budget & National Planning, Mrs Zainab Ahmed during an inspection tour of the project in Ajeokuta.

In company of the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari and the Director General of the Debt Management Office, Patience Oniha, the Minister announced that the sovereign guarantee for the loan has been concluded, therefore, ready for disbursement to the contractor.

“The contractor that is handling this segment 1 is doing a very excellent and very high quality job. We commend NNPC for their foresight in pushing this project and I am happy the guarantee we gave for this project is well justified. We had to give a sovereign guarantee to the lender so that the loan is concluded. I’m glad to say that the loan has been concluded and very soon disbursement will start to the contractor,” she said.

Mrs Ahmed who said the inspection was to ascertain the level of work done, expressed optimism that the project would help revive the moribund industries in the country and create jobs, especially for the locales.

“This is a very important National project, and we have seen that this project is being delivered on time. Despite the slow down in economic activities, this project has not slowed down even for a day. We are glad that gas is being piped across this line from Ajeokuta to Kaduna to Kano. This will help to revive industries in those parts of the country, create jobs, even as the construction work is going on you can see the economic activities that are going on, locales are being employed,” she said.

AKK Gas Project at Ajeokuta.

Earlier, the GMD NNPC, Mallam Mele Kyari said, the project has not suffered any loss of time since commencement, therefore, would be delivered on time, schedule and on cost.

“All our logistics are perfect. Our deliveries are on time & on schedule. We haven’t suffered any major loss of time since commencement of this project,” he said.

Speaking on loan repayment, Mallam Kyari said, proceeds from the project, together with the existing revenues would be used for the loan repayment to China.

On Security, he said although gas pipeline would not be vandalised like the crude oil pipeline, adequate security would be provided using the best technology available.

“We are ensuring high-level security around these pipelines using the best-in-class technology available,” the GMD said.

On benefits, he said, the project would boost domestic gas consumption, power generation and industrialisation.

“The project will cut gas emission into our environment, massive wealth around the pipeline, gas will be available for industries, for power, and to everything you can think of. You will see the coming back of most moribund industries along the right of way of this project,” he said.

Also speaking, the Chairman OilServ Limited, the Contractor handling the project, Emeka Okwuosa said, OilServ as a company is 100% representative of local content from engineering to procurement and production.

“We are abiding by it; the materials that we use here, even the vehicles we deploy here are Nigerian made, they are innoson motors. Clearly the local content is exemplified.

“Apart from some things like the Line pipes based on the fact the loans came from China, the line pipes had to come from China. Apart from that every other thing comes from Nigeria,” he said.

He said, “the project is an international project in as much as we are conducting it in Nigeria so it’s denominated in the US dollar so we don’t have any mismatch in dollar or naira.

Gas Pipeline at Ajeokuta.

“Normally in this kind of project you do engineering design, you go on with procurement of the materials and then proceed to construction but procurement will take time to happen because when you order pipes they will have to mill it overseas and ship.

“They issued us these pipelines that they have so we’ve started pre-construction work ahead of time so it’s a process but as of now if you put it together we are close to 10% of the entire project but it will speed up as soon as we have our land pipes,” he said.

OilServ is committed to building capacity and be a leader in deploying technology.

“In as much as we are a local company, we deploy the highest quality technology. We use automatic and semi automatic wielding system. Most of the pipeline companies use manual wielding systems.

“We want to continuing to improve in a way that we are the company of choice for major projects like this. To diversify and be able to get on with other aspects of work in the oil and gas industry,” the company said.

AKK is the single biggest gas pipeline project in Nigeria’s history.

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