Business

AKK: Clarifying the $1.527bn cost inflation rumour

Stakeholders in Nigeria’s oil and gas space took out time, at different fora last week, to dissect how Nigeria can achieve $10 per barrel oil production and ended up thrashing allegation of AKK gas project inflation. Adeola Yusuf reports

 

The Bureau of Public Procurement on Wednesday cleared the air on the Ajaokuta, Kaduna, Kano gas pipeline project contract, stating that the Nigerian National Petroleum Corporation (NNPC) followed due process in the award of the project.

The Director-General, Bureau of Public procurement, Alhaji Maman Ahmadu, made the clarification when NNPC delegation led by the Group Managing Director, Malam Mele Kyari paid him a courtesy visit in Abuja.

 

Recall that a social media report had alleged that the NNPC inflated the AKK gas pipeline contract to the tune of $1.527bn.

 

Effort by Kyari-led corps

 

New Telegraph has earlier reported how Mele Kyari secured a $300m reduction in the Ajaokuta-Kaduna-Kano Gas project

 

This newspaper had reported that after several failed attempts in the last 13 years to commence project activities, the leadership of the NNPC led by Kyari within one year of his stewardship brought the project on track.

 

This led to the award of the contract at a competitive price and eventual flag-off of construction that the world witnessed in June 2020. The project, which is expected to be completed within a 24-month timeline, is a section of the Trans-Nigeria Gas Pipeline with the capacity to transport about 2.2 billion cubic feet of gas per day.

 

Setting the record straight

 

Speaking on the development, the BPP Boss said the project was never inflated. He said: “The person who spoke to you that mentioned that NNPC followed due process was the officer who reviewed the whole process.

 

“But after I read about it on the social media, I called on him to brief me on the relationship between the due process and what was carried on the social media. “And he noticed a very big variation in what we did and that of the NNPC with what was on the social media.

 

“Then we went further to find out how they came about  the information they disseminated, we saw that they picked the information somewhere else and used it in a manner that was meant to hurt what NNPC did.

 

“But, I think we are on top of the situation, we have our documents intact and it is available for scrutiny by anyone who is interested. “The publication was not true from what I have already said, the publication is not reflective of what happened.”

 

The DG urged investors to disregard such falsehood exhibited in the report, adding that the government was committed to transparency in all its dealings. Ahmadu, who said a good working relationship exists with the NNPC, further commended the corporation on the AKK project. He explained that when completed, it would revolutionise the gas supply chain in the country.

 

Ahmadu noted that the project expected to be extended to other African countries, would help to further launch the country into global oil market. He urged the NNPC to ensure the revival of the oil pipelines to help reduce the number of trucks that plied the roads.

 

Reaction from NNPC

 

Responding, Kyari said that the NNPC would continue to ensure accountability as a public owned organisation. On the AKK gas pipeline, he said that it was unfortunate that people would always want to spread false news to bring down government’s efforts. He noted that the allegation on the project was malicious and pedestrian, adding that public scrutiny was good for business but should not be malicious. “People should be responsible  when subjecting government offices to scrutiny,” he said.

 

The NNPC boss said the Corporation would continue to follow due process according to the procurement law in the country. He stated that the establishment of the BPP Act had encouraged the corporation to do more in line with its extant laws.

 

He said: “We are happy to be here, you will hear a lot but know that we will continue to do our best to be accountable, transparent in all we do. “We are partners with the global Extractive Industries Transparency Initiative; everything we do is open to public scrutiny.”

 

Speaking on the state of oil pipelines, Kyari said that though there were still incidents of vandalism and criminality, efforts were still on to replace aged ones. He said that the corporation was targeting two to three years to ensure replacement of some of the pipelines to enhance products supply.

 

The AKK promise

 

President Muhammadu Buhari on Tuesday, June 30, 2020, launched a $2.6 billion gas pipeline project that will further enhance the country’s energy security. In a virtual meeting, Buhari said the project will provide gas and also facilitate the revival of moribund industries in the West African country.

 

“Today marks an important chapter in the history of our great nation. It marks the day when our domestic natural gas pipeline networks from Obiafu in Rivers State, Escravos in Delta State and Lekki in Lagos State, are being connected through Kaduna to Kano states thereby further enhancing national energy security,” NNPC    quoted Buhari as saying.

 

The Nigerian head of state said the project would create direct and indirect employment while fostering the development, technology transfer and promotion of local manufacturing.

 

“We promised the nation that we will expand the key critical gas infrastructure in the country to promote the use of gas in the domestic market. “These include the Escravos to Lagos Pipeline System – 2 (ELPS-2), Obiafu – Obrikom – Oben (OB3) pipeline and the AKK. I therefore directed NNPC to ensure that these critical projects are completed on time, within budget and specification,” he added.

 

ABC of project

 

The Ajaokuta–Kaduna– Kano (AKK) pipeline is a 614-kilometer (381.5-miles) pipeline developed by Nigerian National Petroleum Corporation (NNPC) to transport natural gas from southern Nigeria to central Nigeria.

 

The project represents phase one of the 1,300-km (808- mi) Trans-Nigerian Gas Pipeline (TNGP) project, which is being developed as 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, according to NS Energy.

Last line

 

 

 

The AKK pipeline has a lot of promises for economic growth and development of Nigeria and every impediment to its success should be properly addressed.

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