Stakeholders call for early delivery of $2.8bn AKK gas pipeline project

By Obaa Esiedesa

Stakeholders in the Nigerian economy have tasked the Federal Government on the need to urgently deliver the Ajaokuta-Kaduna-Kano (AKK) pipeline project within the construction schedule of 18 months.

The 614Km project, owned by the Nigerian National Petroleum Corporation (NNPC), which is expected to cost about $2.8 billion to build, is part of Federal Government plan for rapid industrial development and economic diversification.

Panelists drawn from the petroleum industry, academia, organized private sector and regulatory agencies, who participated in a business webinar hosted by Valuechain Magazine, urged the government to expedite the realization of the full AKK project scope in order to provide the critical infrastructure for industrialization.

Speaking at the Webinar, the Rector of the Kaduna Polytechnic, Prof. Idris Bugaje, who sounded a note of urgency on realization of the project, declared that “AKK should be completed in 18 months” in order to pave way for activation of the second phase of the Trans-Nigeria gas pipeline which would run from Eastern Niger Delta through South-East and Middle Belt to North-East.

Prof. Bugaje pointed out that speedy delivery of the project would compensate for its late conceptualization, explaining that the AKK pipeline was coming 25 years late after numerous textile, manufacturing, and agricultural enterprises in the northern parts of the country collapsed under costly, unstable and inefficient industrial fuel.

He also linked the collapse and relocation of industries from northern Nigeria to Lagos with the rising spate of banditry and insurgency in the region. He also added that the social crisis in the northern part of the country was a result of worsening business environment and consequent surge in the number of unemployed youths.

He lamented that withering of industries, Boko Haram insurgency and growing banditry could be efficiently addressed by restoring industrial vibrancy in the region which, according to him, hosted the largest textile industries in the past.

He also noted that the military campaigns against insurgency have remained costly and ineffective because of the failure to adopt economic measures in the prevailing counter-insurgency efforts.

Stressing the role of gas in economic growth and development, Prof. Bugaje compared the poverty level and low industrial activity to the economic boom and industrial vibrancy in Lagos State which, according to him, has become the preferred regional investment hub due to abundance of gas flowing through robust distribution infrastructure to industrial clusters.

He pointed out that heavy fuel cost killed most of the textile industries in the north, adding that gas has become critical to their revival. He urged all the governors in the north to adopt measures used by the Lagos State government in attracting investments that create jobs and grow the state’s economy.

He listed investment opportunities surrounding the AKK pipeline to include businesses in liquefied petroleum gas (LPG), compressed natural gas (CNG), petrochemical and fertilizer plants, and captive and embedded power production.

On hia part, the Managing Director of the Nigerian Gas Company (NGC), a unit of the Nigerian National Petroleum Corporation (NNPC), Mr Seyi Omotowa, gave assurances that the project would be realized in good time.

Omotowa disclosed that a presidential inter-agency project management team is working with other stakeholders to overcome all failure factors.

He declared that the AKK pipeline is an NNPC project while the project loan is hedged against the corporation’s revenue, with government providing the required sovereign guarantee.

He said the funding model, quality and pedigree of contractors, structures for transparence and accountability, as well as improved security arrangement would enable the AKK project management team overcome all foreseeable challenges and deliver the project in time.

Mr Omotowa who rolled out the economic values of the pipeline stated that it is part of the national gas infrastructure blueprint designed to deepen the domestic, regional, continental market for Nigerian gas.

Technical Adviser to the Minister of State for Petroleum Resources on Regulation, Mr. Umar Gwandu, declared that challenges of cost and security which could encumber early delivery of the project have been addressed by the commercial nature of the pipeline operations when completed.

He made it clear that the target was to ensure that domestic utilization of gas would ride on the overall infrastructure blueprint that involve the Escravos-Lagos Pipeline System (ELPS), West African Gas Pipeline (WAGP), the AKK pipeline and eventual Trans-Saharan Gas Pipeline.

He pointed at the role AKK pipeline would play in rehabilitating moribund industries in northern Nigeria.

Managing Director of Oilserv Limited, the lead contractor in the project, Engr. Adegbite Falade, stated that the project could create 5000 direct jobs during its entire execution time frame, adding that it would also revive the Nigerian construction industry by involving credible subcontractors across the full project scope.

According to him, AKK pipeline project would provide the platform for building the manufacturing sector of the economy, grow the national gross domestic product, boost power generation by 3600 megawatts and ultimately commercialize Nigeria’s vast natural gas resources to generate revenue for government.

He reiterated the need for all stakeholders to seize full opportunity presented in the AKK pipeline project, arguing that benefits of the project would erase the incentives for banditry and insurgency through economic revival of the country.

The AKK pipeline, according to the Publisher of Valuechain Magazine, Malam Musa Bashir Usman, holds immense potential for industrialization of the country, creation of employment for Nigerian youths and reversion of deforestation through displacement of firewood as cooking fuel.

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