Chinese oil firm agrees to secure funds for NNPC’s $2.8bn AKK project

*as NNPC eyes October for ground breaking ceremony

China National Petroleum Corporation (CNPC) has assured the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, of its unflinching commitment towards securing funding for the successful financing and subsequent execution of the Ajaokuta-Kaduna-Kano (AKK) pipeline project.

The huge boost for the project was revealed during a high-level meeting between the NNPC and CNPC Management held on the sidelines of the Forum on China-Africa Cooperation (FOCAC) Summit in Beijing, China, on Monday, a statement from the NNPC noted.

The AKK gas pipeline would enable connectivity between the East, West and North that is currently non-existent. It would also enable gas supply and utilization to key commercial centres in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.

According to the statement signed by NNPC’s spokesman, Ndu Ughamadu, the financing for the 40-inch by 614km AKK gas pipeline is expected to cost about $2.8billion, for the project described as the single biggest gas pipeline in the history of oil and gas operations in Nigeria.

While 85 percent of the money is expected to be funded by the financiers which include Industrial and Commercial Bank of China (ICBC), Bank of China, and Infrastructure Bank of China with Sinosure, China’s Export Credit Agency (ECA) providing insurance cover, the remaining 15 percent will be provided by the contractors which include Oilserve/Oando consortium, as well as Brentex/China Petroleum Pipeline (CPP) Bureau consortium.

Speaking on behalf of over six CNPC subsidiaries at the meeting, the Assistant President and Board Member of the CNPC, Mr. Wang Shihong, said his company placed a very high premium on the AKK Project, describing it as the beginning of several collaborations between both corporations.

“We are in full support of Nigeria’s quest to deliver the AKK project. We are working relentlessly towards securing funding for the project based on regulations and policies of Chinese financial institutions,” Shihong stated.

Responding, Dr. Baru added that the NNPC was looking forward to a successful close-out of the project’s financing towards official groundbreaking ceremony in October, this year.

“We want to maximize the construction work before the end of the year. We are hoping for the quick resolution of the financing agreements so that we will kick-start the project in October, when the dry season begins,” Baru added.