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 reserve estimate of 188tscf. The gas reserves comprise 99tscf of associated gas (AG) and 86tscf of non–associated gas (NAG). In the last 40 years and since the start of active petroleum activities in Nigeria, about 23tscf of gas have been produced. The commercial demand of gas is about 0.33tscf of associated gas 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 mono–cultural economy, dependent on the export of crude petroleum for over 90% of its export earnings1. Associated and non-associated gas produced in the country has historically been flared for no other reasons than inadequate gas infrastructure, inappropriate/unrealistic pricing of gas, low level of industrialization, and inadequate consumptive capacities. It is rather ironically that about 60% of associated gas is flared in a country where only 40% of Nigerians have access to electricity2, while supply shortages are responsible for causing a 3% decrease in economic growth per year3. 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 182.2million and GDP of $486.60 bn at Q120174, 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 $64.4bn, average per-capita usage of 171 kWh, and installed capacity of 2299 MW. An even starker contrast is South Africa, with a population of 54.95 million and GDP of $360 billion, which has installed capacity of 40,000 MW and 4229 kWH per capita by 2015. Considering the deplorable energy situation in the country, the government plans to ensure that gas significantly contribute to power sector target of generating 25,387MW by 2020. Given the above scenario, there is a clear need for Nigeria to quickly harness its vast gas resources to (a) increase its electricity generation; (b) jumpstart its comatose industries; (c) increase domestic use of gas; (d) Export. The proposed Ajaokuta-Abuja-Kaduna-Kano Gas Pipeline (Phase I) Project construction and operation is a further step within the government policy as it will help guarantee supplies network in the North and South of Nigeria and as well as reduce environmental impact 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 States and it will cross seven major rivers and ten major roads. The Ajaokuta-Abuja-Kaduna-Kano Gas Pipeline (Phase I) Project is the Phase 1 of the Trans-Nigeria Gas Pipeline Project that is driven by availability of additional gas supplies from Assa Gas Plant and the need of gas supply to the Northern / Eastern States through Obigbo-Umuahia-Ajaokuta pipeline and Ajaokuta-Kaduna-Kano pipeline. 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 in planned for Abuja, Kaduna, Kano and Katsina. The project development will involve the following: • Surveying and clearing the right of way Nigerian National Petroleum Corporation Outline Business Case Consultant: Alpine Investments Services Limited 28 June 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, road, streams and other Pipelines • Non-destructive testing Surveying and right-of-way preparation will lead to vegetation clearing, loss of biodiversity, and loss of farmlands, crops, 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 impact includes use of existing routes for survey, use of existing ROW during construction and avoidance of excessive land take and bush clearing. NNPC will enforce no- hunting ban during bush cleaning 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. 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 and subsequently for 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 (ROW) of the Pipelines and Products Marketing Company (PPMC’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 States. Based on the choice pipeline route, the pipeline will cross seven major rivers and ten major roads.
Four major development options were considered for the delivery of the proposed Ajaokuta-Abuja-Kaduna-Kano gas pipeline (Phase I) project including 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 evaluated, 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, improved quality and added value from training and local employment. As it were, 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) Frees NNPC’ scarce resources for deployment to other critical uses; (e) Reduced development and infrastructure budget for NNPC.
EIA 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 Eco system. Community surveys were conducted in Nigeria and consultations were made with government officials, land owners, 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% Contractor 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