Project proposal received
The Project Proposal was received by ICRC
Kaduna , Kano , Cross River , Anambra , Enugu , Imo , Niger , Kogi , Federal Capital Territory
Nigerian National Petroleum Corporation
Nigeria is a gas surplus nation, with gas reserves estimated at 188tscf. The gas reserves comprise 99tscf of associated gas (AG) and 86tscf of non-associated gas (NAG). In the past 40 years and since the start of active petroleum activities in Nigeria, about 23tscf of gas have been produced. The commercial demand for gas is about 0.33tscf of AG per year. LNG exports currently account for 40% of the quantity, while domestic users, led by the power sector, account for 60%. Despite Nigeria’s natural gas endowment, the country has remained a monocultural economy, dependent on the export of crude petroleum for over 90% of its export earnings. The AG and NAG produced in the country have historically been flared because of inadequate gas infrastructure, inappropriate/ unrealistic pricing of gas, low level of industrialization, and inadequate consumption capacity. About 60% of the AG is flared in a country where only 40% of Nigerians have access to electricity, while supply shortages are responsible for causing a 3% decrease in economic growth per year. Nigeria has vast reserves of petroleum and natural gas, and the potential to be one of Africa’s richest nations. However, reliable power supply remains a challenge. With a population of 182.2 million and GDP of $486.60 billion in 2017Q1, electricity generating capacity stands at slightly above 3,500 MW. The average per capita electricity usage is 125 kWh, easily one of the lowest in the world. To put this into context, Kenya has a population of 40.05 million, a GDP of $64.4 billion, average per capita usage of 171 kWh, and installed capacity of 2,299 MW. An even starker contrast is South Africa, with a population of 54.95 million and GDP of $360 billion, which had installed capacity of 40,000 MW and 4,229 kWH per capita by 2015. Considering the deplorable energy situation in Nigeria, the government plans to ensure that gas significantly contributes to the power sector target of generating 25,387 MW by 2020. Given the above scenario, there is a clear need for Nigeria to harness its vast gas resources quickly to (a) increase its electricity generation; (b) jumpstart its industries; (c) increase domestic use of gas; and (d) export. The proposed Ajaokuta-Abuja-Kaduna-Kano Gas Pipeline (Phase I) Project construction and operation is a further step in the government's policy, as it will help guarantee the supply network in the North and South of Nigeria, and as well as reduce the environmental impacts associated with gas flaring.
Laying of 614km Ajaokuta-Abuja-Kaduna-Kano 40’’ natural gas pipeline. The states that bestride the pipeline corridor are Kogi, Federal Capital Territory (FCT Abuja), Niger, Kaduna, and Kano, and the pipeline will cross seven major rivers and 10 major roads. The Ajaokuta-Abuja-Kaduna-Kano Gas Pipeline (Phase I) Project is phase 1 of the Trans-Nigeria Gas Pipeline Project that is driven by the availability of additional gas supplies from Assa Gas Plant and the need for gas supply in the Northern / Eastern states through the Obigbo-Umuahia-Ajaokuta and Ajaokuta-Kaduna-Kano pipelines. This project is taking place against the backdrop of the new gas pricing and domestic supply context in Nigeria. The feed gas into the pipeline system is expected to be 3,500 MMscfd of dehydrated wet gas sourced from various gas gathering projects in the Southern region. Hydrocarbon liquids from this process will be further processed at Ajaokuta to produce liquefied petroleum gas (LPG), while the remaining will be transported through the pipeline to serve as feed stock for power and new petrochemical facilities planned for Abuja, Kaduna, Kano, and Katsina. The project development will involve the following: • Surveying and clearing the right-of-way (ROW) for the Nigerian National Petroleum Corporation Outline Business Case Consultant: Alpine Investments Services Limited, June 28, 2017 • Hauling and stringing of pipe(s) • Bedding of pipe(s) • Welding • Digging of trench • Lowering of pipe and backfilling • Installation of valves and special fitting and joint coating • Pipeline crossings on rivers, roads, streams, and other pipelines. Nondestructive testing, surveying, and ROW preparation will lead to vegetation clearing; loss of biodiversity; loss of farmlands, crops, and habitat; and migration of wildlife. Removal of vegetation will further expose the soil to excessive weather conditions and soil erosion. Measures to ameliorate the ecological impacts include use of existing routes for surveys, use of existing ROW during construction, and avoidance of excessive land take and bush clearing. NNPC will enforce a no-hunting ban during bush cleaning and restriction of clearing within the ROW habitats. The scope of work includes engineering, procurement, construction, installation, testing, and commissioning of a 40” x 614km class 600# pipeline system from Ajaokuta to Kano, with associated intermediate and terminal facilities to supply natural gas to off-takers at Abuja, Kaduna, and Kano.
To supply gas to uptakers in Abuja-Kaduna and Kano (AKK) and subsequently for the export market. The project involves the construction and operation a 614km Ajaokuta-Abuja-Kaduna-Kano 40’’ Natural Gas Pipeline Project. The proposed pipeline will be supplied with pipeline quality gas sourced from various gas gathering projects in the southern part of Nigeria, at a minimum pressure of 1,000 pounds per square inch gauge (psig) at the Ajaokuta tie-in, and delivered to Kano also at a minimum pressure of 1,000 psig. NNPC intends to route the AKK pipeline through the major existing right-of-way of the Pipelines and Products Marketing Company's crude oil/product pipeline to Kaduna, although some pipeline routes will be on completely new alignments. The states that bestride the pipeline corridor are Kogi, Federal Capital Territory (FCT Abuja), Niger, Kaduna, and Kano. Based on the choice of pipeline route, the pipeline will cross seven major rivers and 10 major roads.
Four major development options were considered for the delivery of the proposed Ajaokuta-Abuja-Kaduna-Kano gas pipeline (Phase I) project, including the implement project option, delay project option, no project option, and partnership with the private sector. Several PPP procurement methods are possible in the delivery of AKK Pipeline Project. These are the BT, BOT, and DFBOT. An analysis of the various options recommends a BT with contractor financing option for the AKK Pipeline Project, primarily because it exhibited better value for money than the other options through reduced procurement, development, and management costs; reduced procurement risks; shorter lead-in times; and improved quality and added value from training and local employment. NNPC lacked the funds to undertake the project. In addition, the BT option relieves NNPC the immediate burden of the huge initial outlay for the development while still vesting the operation and maintenance of this important infrastructure asset on NNPC. The likely benefits of the BT option are: (a) increased efficiency in the execution of the pipeline project; (b) reduced risk for the public sector, by transferring part of the risk to the contractors; (c) the private partners will execute the project more rapidly because of the incentive to maximize returns on investment; (d) it frees NNPC’ scarce resources for deployment to other critical uses; and (e) reduced development and infrastructure budget for NNPC.
EIA was conducted along the project route for the purpose of acquiring right-of-way, compensation paid to communities to be dislodged by the project, and reservation of the ecosystem. Community surveys were conducted in Nigeria and consultations were made with government officials, landowners, land users, tenants, local leaders, men, and women.
Project summary AKK. The scope of work includes engineering, procurement, construction, installation, testing, and commissioning of a 40” x 614km class 600# pipeline system from Ajaokuta to Kano, with associated intermediate and terminal facilities to supply natural gas to off-takers at Abuja, Kaduna, and Kano. Table 1: Scope of work S/N pipeline segment/TGS diameter/length: 1. Ajaokuta MS/TGS – Abuja PS 40” x 200Km; 2. Ajaokuta TGS; 3. Abuja PS – Kaduna TGS 40” x 193Km; 4. Abuja TGS; 5. Kaduna TGS – Zaria PS 40” x 97Km; 6. Kaduna TGS; 7. Zaria PS – Kano TGS 40” x 124Km; 8. Kano TGS. The execution of the project was originally anticipated to take three (3) years; however, alternative means of reducing the project execution were considered and the new estimated construction period is two (2) years. Budget provision/funding for the project: 100% ocntractor financing model.
The Project Proposal was received by ICRC
ICRC reviewed the OBC report in line with Nationa PPP Policy
ICRC issued Certificate of Compliance to NNPC
FEC Approved OBC
The Federal Executive Council (FEC) at its meeting on the 13th of December, 2017 gave approval to the US$2.8 billion Ajaokuta–Kaduna–Kano (AKK) gas pipeline project. The PPP Compliance Certificate of the project in line with the ICRC Act and the National Policy on Public Private Partnership was issued by the Infrastructure Concession Regulatory Commission (ICRC) on the 10th of July, 2017. The project will be delivered through a Build and Transfer (BT) PPP model with 100% Contractor Financing. The 614 kilometre 40-inch gas pipeline project was presented by the Minister of State for Petroleum to FEC together with the Compliance Certificate. The AKK Gas Pipeline Project constitutes Phase 1 of the Trans-Nigeria Gas Pipeline (TNGP) Project. It originates from Ajaokuta traversing Abuja, Kaduna and terminating at a terminal gas station in Kano. The proposed pipeline will be supplied with quality gas sourced from various gas gathering projects