AKK Project Tests Indigenous EPC Firms’ Capacity to Deliver

Emmanuel Addeh writes that the critical role played by Oilserv in accelerating the completion of the Ajaokuta-Kaduna-Kano (AKK) pipeline project underscores the reasoning that if given the opportunity, Nigerian indigenous engineering firms can raise the performance bar in in the oil sector.

The COVID-19 pandemic in 2020, literally opened the eyes of Nigerians to the need to grow the capacity of its indigenous firms to rise to the occasion, especially in periods of national emergencies.

At the time, even though in the oil and gas sector, many local companies did well in filling the huge gap left by expatriates who were mostly stuck or had been recalled by their countries of origin, quite a number of projects were practically abandoned because of personnel and equipment deficit.

That indeed, raised the question of building local capacity to meet the need of carrying out massive projects like the AKK pipeline,  a 614km-long pipeline being developed by Nigerian National Petroleum Company Limited (NNPC) to transport natural gas from southern Nigeria to parts of the north.

The $2.8 billion pipeline project is the phase one of the 1,300km-long Trans-Nigerian Gas Pipeline (TNGP) project, being part of Nigeria’s Gas Master Plan to utilise the country’s surplus gas resources for power generation as well as for consumption by domestic customers.

In addition, it forms part of the proposed 4,401km-long Trans-Saharan Gas Pipeline (TSGP) to export natural gas to customers in Europe as Nigeria holds Africa’s biggest gas reserves.

Like the other partitions, the first segment of the project which runs from Ajaokuta, covers a distance of approximately 200 kilometres and will transport up to 3,500 million cubic feet (mcf) of gas a day from various gas gathering projects in southern Nigeria.

Oilserv was one of the consortium of two local companies awarded the Engineering, Procurement, and Construction (EPC) contract for the Ajaokuta-Abuja section of the pipeline. Since then it would appear that the company has not looked back.

A leading oil and gas EPC firm, the company says it has relied on innovation to become a globally competitive integrated energy company with a history of completing turn-key projects in Nigeria and across Africa while utilising advanced technologies.

The Group Chief Executive Officer, Oilserv Emeka Okwuosa, who heads the company executing segment ‘A’ of the project, has now said it will be completed  by July 2024.

On a visit to the project last week, while responding to questions from the Minister of State, Petroleum Resources (Gas), Ekperikpe Ekpo, around the Pai River crossing session in Kwali Area Council of the Federal Capital Territory, Abuja, Okwuosa said all hands were already on the deck to ensure the deadline was met.

Okwuosa noted that the Pai River crossing was peculiar, hence the deployment of Horizontal Directional Drilling Technology (HDDT) to ensure a perfect execution of the project.

“From our schedule, I know we are finishing next year. On the main pipeline itself that will deliver the gas, we are optimistic that by July, or August next year, we would be done.

“We have our schedule as far as where we are today and we are working hard to mitigate and make sure we deliver. A lot of what we have to deal with in the next six months will be the river crossings area…Our commitment is more than 100 per cent,” he noted.

Speaking on the importance of the AKK gas pipeline project to the development of the nation’s economy, Okwuosa explained that it was capable of spurring development in parts of the country.

“After completion, we would be able to have gas and NNPC the owner, would be able to deliver gas to the Northern part of Nigeria, but also spur development of gas in the Southern part of Nigeria and create a lot of wealth as well in the South.

“With gas available, you have power, Compressed Natural Gas (CNG) for vehicles to run with and reduce dependency on Premium Motor Spirit (PMS), build fertiliser plants, help agriculture, and so on.

“This project will change the landscape of energy delivery and the economy of Nigeria will change,” he assured.

Nigeria is seeking to enable economic diversification through domestic gas footprint expansion projects including the Escravos to Lagos Pipeline System (ELPS and ELPS II), the Obiafu-Obrikom-Oben (OB3) gas pipeline and recently AKK. Oilserv is also deeply involved in OB3 project.

Financing by the federal government has been carried out to the tune of over $1.1 billion on the project, as per the last information available, while to date none of the project activities has been abandoned .

Okwuosa says he believes that no matter the volume of gas Nigeria has underground, if the country is not able to harness it, it is a waste of resources.

“The AKK project is a very crucial project and the importance is underpinned by the fact that for us to develop as a country we need energy and the most abundant source of energy to Nigeria is gas. Fortunately for us, we have a lot of gas reserves in the country.

“But gas is meaningless if you cannot produce and transport it. Transportation is critical because you cannot easily store gas, you need to move it from the point of production to where it would be used, match availability with utilisation.

“ So the AKK pipeline project is a major part of the Nigerian Gas Master Plan, the backbone of the gas transmission system. We have gone pretty far as the execution of the project is concerned. We are working closely with NNPC as the client to have it delivered,” he added.

According to him, the NNPC has been funding the project from inception to navigate the negative impact of the non-availability of funding from China, stressing that the Covid-19 lockdown and the huge flooding that happened in the last rainy season also in some way impacted the project.

To ensure transparency, in terms of the project financing, the procurement process was supervised by the Infrastructure Concession Regulatory Commission (ICRC)  and endorsed by the Bureau for Public Procurement (BPP).

“We have so far spent over $1.1 billion on this project from our cash flow…This company can fund this project, so we do not need any support on this project to deliver this project now,” NNPC’s Mele Kyari, said during one of the visits recently.

Giving a tour of the site in June, Project Manager, Oilserv Limited Pipelines and Facilities, Steve Nnorom, recently disclosed that the company was ramping up work on the AKK pipeline project, despite a few terrain challenges. The security challenges had also been largely tackled.

If anything, what has become clear is the need to encourage local content in the oil and gas industry as Oilserv has shown that it is not a pushover, even though an indigenous company.