Tracking Progress at AKK Gas Project

Emmanuel Addeh, who was part of an entourage that toured the AKK pipelines gas project recently, provides an update on the undertaking, said to be one of the potential game changers for the gas sector in the country.

On June 30th, this year, President Muhammadu Buhari officially flagged off the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, a joint venture project between Oilserv limited, a fully indigenous company and the Nigerian National Petroleum Corporation (NNPC).

Succinctly put, the AKK project is expected to boost the country’s gas distribution system by establishing a connecting pipeline network between the eastern, western and northern regions of Nigeria.
A 614 km-long natural gas pipeline between Ajaokuta and Kano, the project forms part of the first Phase of the Trans-Nigeria Gas Pipeline (TNGP) project, an integral part of the proposed 4,401km-long Trans-Saharan Gas Pipeline (TSGP) to export natural gas to countries in Europe.

While in the past, a foreign firm would perhaps have been awarded the contract, the choice of Oilserv Limited, did not come to many Nigerians as a surprise, having proven to be deserving of it, with the near perfect execution of a handful of other pipelines and engineering project management and construction jobs in the last couple of years.

Aside boasting of being the first and only Nigerian indigenous company to fabricate, install and commission the largest oil manifold station for Shell Petroleum Development Company Ltd. (SPDC), it also successfully designed and constructed the largest Gas Transmission Pipeline System in Nigeria and Africa – the Obiafu/Obrikom to Oben Node Gas Transmission Pipeline System, which forms a part of the Nigerian Gas Master Plan (NGMP).

Many strategic reasons have been adduced for the commencement of AKK gas pipeline project, but suffix to say that it is expected to reduce the large volume of gas flared annually in Nigeria.
In addition, the AKK natural gas pipeline project is also expected to promote and increase the local usage of domestic gas, while increasing the country’s revenue generation through the export of natural gas, boost employment opportunities, aid in revamping local gas-based industries along its axis as well as have a multiplier effect on small scale industries and jobs done by artisans.

Under the leadership of its Chairman, Chief Executive Officer, Mr. Emeka Okwuosa, a seasoned engineer, administrator, entrepreneur with over 35 years of experience in maintenance and operations, teaching, wireline logging and interpretation, seismic acquisition, the Oilserv quietly got down to work and in just six months has achieved a major landmark in the project which is expected to be completed by 2023.

Okwuosa, whose expertise also spans processing and interpretation, pipeline engineering, procurement and construction (EPCIC), project management, drilling and drilling services, having worked in Europe, North Africa, West Africa, Gulf of Guinea/Central Africa and Indonesia, during the tour vowed to complete the project on schedule.

The company did not just get accolades from the Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Mallam Mele Kyari and the Minister of Finance, Budget and National Planning, Dr Hadiza Ahmed, it also got praises for not missing a single timeline in the last six months that the project commenced.
An elated Okwuosa, stated that the company deployed high level equipment, the first in the industry, to fast-track the work being done, noting that the project will be finished on schedule without hassles.

He also highlighted the local content policy of the company on the AKK natural gas pipelines, explaining that all the professionals handling the job were Nigerians, with most of the procurements also locally sourced.

“Oilserv as a company is 100 per cent local content, from engineering to procurement to construction. The things we have to buy overseas, we do, but those we produce in Nigeria, we get here. So, we are abiding by local content plan. As seen clearly, the materials, the vehicles are Nigerian made.

“Apart from things like the line pipes, because the loan was obtained from China, the line pipes have to be obtained from there, but aside that, every other thing comes from Nigeria,” he explained.
He said because the project was denominated in dollars, there was no foreign exchange issues or any need for contract re-evaluation, even after the fall in value of the local currency.
“We started pre-construction work ahead of time. So, it’s a process, but we are speeding things up. We will continue to build capacity and remain a leader in the deployment of technology. Inasmuch as we are a local company, we deploy the highest and latest technology.

“As you can see, this is automatic and semi-automatic welding system. Most of the pipelines companies use manual welding. So, we want to continue to improve such that we become a company of choice for major projects like this.
“We want to also diversify and get into other aspects of work in the oil and gas industry. We have a security procedure based on strategy and plan and this is dictated by the area we operate in after doing a security scan.
“We do the necessary. This is because if you are in tandem with the community, you are not likely to have problems with them,” he noted.

Going forward, the company stressed that with the arrival of the major line pipes from China, haulage will commence within the holiday while major construction work will continue undisturbed despite the Christmas season.
“We are using seven stations. It is important to know that everybody here, we are all Nigerians. There’s an automatic system that fixes all the task. There are several fillings until we get to the stage of the seven layer. The welding joint is stronger than the content of the pipe itself.

“One thing I will say clearly is that this project, we all know how important it is. It is a national project of utmost importance and Oilserve has demonstrated capacity over the past 25 years.
“We have built several pipelines designed and built that I will say here clearly that the NNPC has always supported us and given us the opportunity.

“In this particular project, we have the utmost support of the NNPC and that’s why we were able to take it to this level. The GMD has taken this project as his pet project and he has always been on top of it.
“Sometimes, we feel pressured, but we understand what it means to do this kind of job. We want to assure you very clearly that this project will be delivered in line within the scheduled time and will be top quality.

“One thing that the general manager has stated here is that we are not just an indigenous company, we employ local materials and local resources. If you look at the construction vehicles, they are Innoson vehicles, they are not Toyota,” he added.
Okwuosa, who also spoke on how the company has been able to maintain cordiality with its host communities, explained that once the right thing is done, many communities will not likely carry out activities that will lead to breach of peace.
“As we move, we employ people from the communities and where they exist, they are used as sub-contractors and it is a testimony to our adherence to local content. And we once more want to assure you that we will deliver on time,” he stressed.

Representatives of the federal government, during the event, noted that China Exim Bank, which is financing 85 per cent of the $2.5 Ajaokuta, Kaduna, Kano (AKK) gas pipelines project, had concluded arrangements to begin disbursement of the funds.
While the government gave a sovereign guarantee during the loan negotiation, part of which is being executed by a leading indigenous Engineering, Procurement and Construction (EPC) Company, Oilserv Limited, the national oil company is handling a 15 per cent equity investment.

The 614 km x 40-inch gas pipeline which spans Ajaokuta in Kogi state to Kano through the Federal Capital Territory (FCT), has also witnessed considerable progress since its inauguration, with oilserve’s deployment of large scale hi-tech automatic welding equipment.

Speaking during the tour of the project, Minister of Finance, Budget and National Planning, Dr. Ahmed, who was taken round the massive undertaking, told journalists that all the processes for the deployment of the funds had been completed.
While lauding the contractor, for doing what she described as “high quality job”, Ahmed noted that it is now clear that the decision of the federal government to act as a sovereign guarantor was not misplaced.

“This is a very important national project and we have seen it is being delivered on schedule despite the slowdown in economic activities. This programme has not slowed down a bit. Work has not stopped for one day.
“I am glad that gas will be piped through this line from Ajaokuta to Kaduna to Kano. This will help to revive industries in those parts of the country, create jobs and even as the construction is going on, a lot of other activities are also going on.
“The locals are being employed and the contractors on site are working on a day to day basis. The contractor doing this job is doing a very high quality job and we commend NNPC for their foresight in pushing for this project.

“I am happy that the guarantee we gave for this project is justified. We had to give a sovereign guarantee to the lender so that the loan is concluded. I am glad to say that the process has been concluded and very soon, the disbursement will start to the contractors. For now, the cost is $2.5 billion,” she said.

In his remarks, the NNPC GMD, Kyari, stated that apart from cutting massive emission into the environment, the project will aid the creation of wealth as well as help in revamping moribund industries along the AKK axis.
“It will cut down gas emission into the environment, create massive wealth along the line because gas will be available to industries and for power and ultimately, you will see the revamping of moribund industries and also create new business opportunities,” he stated.

On security of the project, he said: “Typically, gas pipelines are never subject of vandals’ attacks, although it happens, but it’s very rare. Aside that, we are doing some security along these lines which is to have optic fibre that will run parallel with the pipelines so that if there’s any infractions, we will know about it and take action.
“But more importantly, we are using the best of technology so that where they are vulnerable, we bury them deeper than normal places, so we don’t think there’s any high level risk to these pipelines.”

He stressed that there’s a moratorium on the loan and as soon as gas starts flowing through the lines, the revenue from there and existing revenue streams will be used to pay for it, saying that the parties do not have issues around the repayment plan.
“We borrowed 85 per cent of the total project scope as loan and we provided 15 per cent as NNPC equity from its own resources and that means that the 85 per cent that will come from our Chinese partners will be available for drawdown,” he added.
The NNPC boss stated that as it is, it’s almost impossible to halt the project or even slow it down except for an act of God, which he said is beyond human control.

“All our logistics are perfect, our deliveries are on time. Everything is on schedule and we have not suffered any major loss of time. Our pipes are arriving on schedule. They have arrived ports in Warri and we are moving them to site either by road or by rail to Itakpe. We have no fear whatsoever.

“As it is, the board of the bank of China has approved this this loan and nothing else will stop this project unless it is a force majeure which we cannot see,” he assured.
With the project now in top gear, and work going on as speedily as possible, the AKK project is on course to deliver one of the grandest gas projects in Sub-saharan Africa in the coming months.