The Nigerian National Petroleum Corporation (NNPC) is about to secure a $2.5 billion Pipeline Financing agreement from China in the next six months.
The Financing Agreement was disclosed by NNPC Group Managing Director (GMD), Mr. Mele Kyari, while speaking on a monitored interview with Bloomberg Africa during the World Energy Conference in Abu Dabhi in Saudi Arabia on Monday.
The details: While speaking with Bloomberg, Kyari disclosed that although the financing agreement has been ongoing for a while, he noted that the NNPC and the Chinese counterpart are about to close the deal which will deliver about 2,600mw of power.
Kyari disclosed; “As you have mentioned, this project will deliver 2,600mw of power. That is quite significant in the context of our situation.”
“Because financing is everything, what we did is to get a long conversation with the Chinese, quite a long conversation, we are very close to closure. In the first instance, we have secured 15% financing in our account, close to $430 million. We are expecting the closure of 85%, $2.5billion. Once that is secured, the pipelines will be delivered”
Asked when the financing is expected to close, Kyari replied that it will be concluded within the next six months.
The Pipe-line Project: Speaking on the transformation the pipeline contract means for the power system in Nigeria, Kyari stated that “this is adding 2,600mw of power from three capital power plants to be located in Kaduna, Abuja and Kano, and an adding additional capacity which will spur industrialization in these locations.”
On the side-line, Kyari stated that the delay in Nigeria’s deep offshore project was due to uncertainty in Nigeria’s fiscal environment and that is affecting disputes with the partners, which stalled the processes.
“Regarding the offshore, what we did this time is to have some kind of commercial closure, and we are very close to one of them which will come very soon, this is very important because it will open a new frontier of opportunity in the deep off-shore”.
Commenting on the recent OPEC quota cut, the NNPC chief stated that Nigeria is ready to comply with the cut because production is quite predictable due to improvement recorded in recent times.
The Saudi’s attacks: Reacting to the recent Saudi’s attack, Kyari stated that a 50% cut in Saudi’s Oil supply is equivalent to 5million barrel and this is quite significant. According to Kyari, the cut could pose an enormous challenge in the oil market.
“50% or 5million barrels is quite significant. I know they are still trying to figure out exactly what happened. When disclosure is made on that, we will be in a position to comment fully. It can be a big challenge for the oil market.”