‘AKK gas pipeline project will revive industries’

Engineer Emeka Okwuosa is the Chairman of Oilserv Limited, the lead contractor for the first segment of the recently flagged off Ajaokuta-Kaduna-Kano (AKK) gas pipeline project. In this interview, he reveals how the project will revive many of the moribund industries in the North.

Do you guarantee your readiness and capacity to deliver?

We are already working. We are laying the lines and we shall deliver within the stipulated time.

Oilserv is a 100 per cent indigenous company currently employing more than 600 staff. With AKK, we probably will go to between 1,500 and 2,000 at the peak of the personnel matrix. But the fact remains that we are ready. This is not the first project. We are commissioning the OB3 gas project which is actually slightly larger than this in terms of diameter. The OB3 gas pipeline is 48 inches in diameter.

So, we have the experience, we have the personnel, we have the equipment and we are capable and we will deliver this project.

What plans do you have for youths of the host community?

Like I said, we will crank up our employment by more than 1,000, and the major part of this 1,000 will be engines of the areas where we are. We have a clear programme to develop the areas where we build pipelines.

What does this project represent in the Nigerian content policy implementation?

First of all I give thanks to Mr. President for being at the forefront of driving progress in the oil and gas industry.

As you may be aware, which a lot of people may not, President Muhammadu Buhari built the infrastructure we had in the 1970s when he was the Federal Commissioner for Petroleum Resources. Most of these refineries you see today were built within the period when he was there.

When Buhari came to power in 2015, he made domestic gas infrastructure development a cardinal project. This AKK project has been on the drawing board since 2008, 2009. He made it happen. This project shows clearly the dedication of President Buhari to local content and local capacity. Oilserv is an example of that, and Oilserv shows clearly that government means what it says.

We have partners. It’s a consortium arrangement, and this arrangement has a Chinese company called CFHEC.

You may be aware that this project is not funded directly by the government. This project is funded using facilities or loans that are obtained for it. The project is commercially viable.

So in lieu of that we have injected a Chinese partner to meet the Chinese content requirements. But Oilserv is the primary Engineering Procurement Construction (EPC) company. Our experience is what will help to drive this process a lot. We also have Oando in the consortium, it is a partner; they are not an EPC company, but we have partnered for a long time in other projects where Oilserv is the EPC company.

What is the viability of the project?

It is fully viable; the facility being taken is meant to be repaid in 15 years, but this project can pay itself in less than 10 years, because this is a commercial venture. When you pipe this gas, you have gas flowing through to industries to power plants. There are tariffs to be paid to even transport the gas.

What challenges do you envisage in delivering the project?

Every project comes with its challenges. There are challenges to build a project like this in virgin forests, to go through rivers, to go through rocks, to deal with security issues. These are challenges; but I don’t have fears because we have the knowledge and the experience to deal with it. We are very ready to deliver the project and on time.

What are your perspectives on the value for this project?

Gas is very important to the economy of Nigeria. Nigeria is predominantly a gas country; not necessarily an oil country. We have an abundance of gas reaching up to 200 trillion cubic feet already proven and existing; but clearly there is far much more than that because exploration has not gone far much in the gas sector.

When we look at real gas issues in the country, I would say that Nigeria has not developed the capacity to utilise gas; and the capacity for gas utilisation is about infrastructure.

To utilise gas in Nigeria, what is required is clearly a transportation infrastructure. Nigeria conceived this in a clear way since the early 2000s and came up with the Nigerian Gas Master Plan (NGMP) of which a portion has been constructed. One is the Escravos to Lagos Pipeline which starts from Escravos, goes through Benin and then heads to Lagos. It goes all the way to the Egbin Power Station and feeds the entire Lagos.

The other section of the NGMP is actually what was going to kick off from the Qua Iboe Terminal (QIT) in Akwa Ibom State, and then goes to Umuahia and Enugu to Ajaokuta. The system would now progress from Ajaokuta to Abuja, to Kaduna and Kano.

So what we are working to achieve now is the AKK which is the section from Ajaokuta to Kano. The AKK is very important because without the existence of this pipeline, the entire section of the Qua Iboe pipeline which ends in Ajaokuta will not be commercial enough in the sense that the offtake will not be robust enough to justify it.

So, in reality, gas will make a lot of difference because with gas availability industries can run. And besides industries running, we are also talking about power generation in gas-based industries like urea plants which manufacture fertilisers.

So, in terms of the economic effect, it is going to be massive. AKK is very important and it is going to make a lot of difference in the economy of Nigeria.

Is there any obligation from other operators to feed gas into the AKK pipeline?

Let me say that all these activities are centred on the Nigerian National Petroleum Corporation’s (NNPC) state of operations. They articulate this with the International Oil Companies (IOCs). When you look at the midstream industry, which are these pipelines, you find out that NNPC is at the centre of activities; and the corporation has done a lot of studies, a lot of operations economics, a lot of work on long term outlook value generation, a lot of work on industry collaboration. I am privileged to be pretty involved in all these.

I am optimistic and that is why I am also an entrepreneur. So, let us also put this in perspective when we talk of the AKK pipeline. Industries that are already moribund are huge in number. If you go to Kaduna you will see that, and if you go to Kano you will see that. So, when there is energy in the form of gas, these industries will have the impetus to kick start again. Of course, we are not yet talking about other industries that will spring up from the scratch. So I am optimistic.

Given the project terrains, do you think the 2023 timeline is feasible?

Of course; you will always have challenges when you construct pipelines in Nigeria. Those challenges come from the issues of security, local conditions, road conditions; because you have to move the pipes by road most of the time. We do not have a robust rail system to do that. So, that impacts a lot on speed.

Having said that, the timing put on this project is well articulated. It is feasible; and we know it is possible. It is just that we have to work hard on it because it is necessary to do that.

So, when you look at the economic impact, I would say clearly that the impact of this project is massive in concept and will be massive in reality.