ONE of the big promises made by President Muhammadu in his campaign for Nigeria’s presidency is the Ajaokuta-Abuja-Kaduna-Kano (AKK) gas pipeline project.

The project entails the “engineering, procurement, construction and commissioning” of 614-kilometers gas pipeline and stations, traversing the states of Kogi, Niger, FCT, Kaduna and Kano. It is to transport dry gas from the nation’s rich gas fields in the Niger Delta to the Northern parts of Nigeria.

This pipeline project is itself a section of an ambitious pipeline project to supply gas to Europe through the proposed Trans Sahara Gas Pipeline (TSGO) and Nigeria Morocco Gas Pipelines.

The Federal Executive Council (FEC) under President Buhari last week (March 2020) took the important and decisive step to fast track the closure of all outstanding issues relating to the financing and the issuance of a Sovereign Guarantee (SG) to support debt service and China Export and Credit Insurance Corporation, SINOSURE’s policy to underwrite up to a maximum of 85 per cent of the project cost, which is now reduced to USD 2,591,849,049.19. The earlier contract, approved by this administration for the AKK was USD2,890,522,548.37 based on 100 per cent “Contractor Financing Model.”

This changed when SINOSURE offered to underwrite 85 per cent only of the entire contract sum and the basis of the relationship changed to “EPC Lump Sum Contract Award.”

This arose from a rethinking on the part of the Nigerian National Petroleum Corporation (NNPC) which came up with a new project financing design by with the balance of 15 percent of financing was taken up by them. The Nigerian Gas Company (NGC) a subsidiary of the NNPC quickly intervened to provide the required 15 per cent, the equivalent of US 434 million equity contributions from internal sources and accumulated revenues.

To quicken the speed of the project takeoff, this 15 per cent equity funding has been paid and will be used to proceed with the project to mitigate further delays and ensure that the project is back on track.

The “gas penetration” to these areas of the country will significantly reduce energy cost for industries along the pipeline corridor in addition to the massive generation of employment during and after the construction.

Read more===https://thestreetjournal.org/2020/07/akk-gas-pipeline-president-buharis-big-infrastructure-push/