China guarantees funding for AKK Pipeline projects

BABATUNDE SCOTT   |    

The China National Petroleum Corporation (CNPC) has assured Nigeria of its unflinching commitment towards securing funding for the financing and execution of the Ajaokuta-Kaduna-Kano (AKK) pipeline project.

The Nigerian National petroleum Corporation (NNPC) disclosed this in a statement signed by its Spokesman, Mr Ndu Ughamadu, in Abuja late on Monday.

It said that CNPC gave the assurance to the Corporation Group Managing Director Dr Maikanti Baru during a high-level meeting between the NNPC and CNPC Management held on the sidelines of the Forum on China-Africa Cooperation (FOCAC) Summit in Beijing, China.

Speaking on behalf of over six CNPC subsidiaries at the meeting, the Assistant President and Board Member of the CNPC, Mr Wang Shihong, said his company placed a very high premium on the AKK Project, describing it as the beginning of several collaborations between both corporations.

“We are in full support of Nigeria’s quest to deliver the AKK project.

“We are working relentlessly towards securing funding for the project based on regulations and policies of Chinese financial institutions,” Shihong stated.

He added that the CNPC cherished its relationship with the NNPC and pledged to fully support his company’s subsidiary, CPP Bureau, partner in the AKK Project, to ensure success of the initiative.

Responding, Baru said that the AKK Project was dear to Nigeria, adding that while at the FOCAC Summit, President Buhari reiterated the potentials of the project to strengthen Nigeria-China relations.

He added that the NNPC was looking forward to a successful close-out of the project’s financing towards official groundbreaking ceremony in October.

“We want to maximize the construction work before the end of the year. We are hoping for the quick resolution of the financing agreements so that we will kick-start the project in October, when the dry season begins,” Baru added.

Also, Executive Vice Chairman of Brentex, one of the contractors handling Lot 3 of the project, Mr Sani Abubakar, said since signing the Engineering, Procurement & Construction (EPC) Contract, tremendous progress had been made towards securing financing for the project.

He commended Baru for driving the project, adding that following his leadership, some of the elements that were not part of the process were brought in, including providing financing for early works.

The Chairman of Oilserve, one of the contractors handling Lot 1 of the project, Dr Emeka Okwuosa, said they had already gone into some agreements with Brentex/CPP consortium on financing, which in the end, would bring the project under a single financing arrangement.

The AKK gas pipeline project would enable connectivity between the East, West and North that is currently non-existent.

It would also enable gas supply and utilization to key commercial centers in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.

Financing for the 40-inch x 614km AKK gas pipeline is expected to cost about 2.8 billion dollars while 85 per cent of the money was expected to be funded by the financiers which include Industrial and Commercial Bank of China (ICBC).

Other financiers are Bank of China, and Infrastructure Bank of China with Sinosure, China’s Export Credit Agency (ECA) providing insurance cover.

The remaining 15 per cent will be provided by the contractors which include Oilserve/Oando consortium, as well as Brentex/China Petroleum Pipeline (CPP) Bureau consortium.

The project is described as the single biggest gas pipeline in the history of oil and gas operations in Nigeria

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