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Energy

NNPC GMD says AKK pipeline, Nigeria’s biggest gas project is 15% complete

Kyari has revealed that the ongoing construction of AKK Gas Pipeline project is at 15% completion currently.

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Crude oil market remains unpredictable- NNPC Boss

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari, has revealed that the ongoing construction of Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project is at 15% completion currently.

According to a report from News Agency of Nigeria, this disclosure was made by Kyari at the inspection of the second leg of the project at Karogo community in Igabi Local Government Area, Kaduna State, on Tuesday, December 15, 2020.

READ: N1.5trillion accumulated losses of NNPC, a serious going-concern risk – PWC, SIAO Partners

READ: FG to deliver 1 million vehicle conversion to autogas by end of 2021

The $2.8 billion 614 kilometre gas project, which was flagged off in July 2020 by President Muhammadu Buhari, is expected to boost domestic gas consumption, power generation and industrialization.

What they are saying

Kyari said:

  • The project is currently at about 15 per cent completion but what is important for us to know is that we are crossing the river Niger, what we call the Ndoni-Aboh river crossing in Rivers and Delta states that will deliver gas from the eastern part to the country into the western corridor. That means expanding gas supply into the helpline and also making gas ready.
  • “We are happy that this project is going on and we will deliver it on course and schedule. We have all the assurances of government and particularly that this government is focused on delivering this project, so that we clear the transnational gas pipeline which has eluded us.
  • “By completing the project and expanding the L2 lines and crossing the Ndoniabo River, we would have created a major gas trunk line for gas delivery to our domestic market.”

READ: NNPC records 43% drop in pipeline vandalism in May

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READ: Medical Free Zone to save Nigeria about $1billion in annual medical tourism – NEPZA

While commending the NNPC and the contractors for their commitment and quality of work done so far, the Minister of Finance, Budget and National Planning, Hajiah Zainab Ahmed, gave assurances of full funding of the project for delivery at the targeted timeline. She said:

  • I have seen very high level of work that has been done and its of excellent quality, I can see the potential of what will happen to the cities that the project is passing. It is going to bring huge businesses and employ a lot of people. Already the project is employing people at the level the work is done so far. This project is assured in terms of funding, we already secured a loan of 2.5 billion dollars from China Eximbank, the financing has been closed, all that is done now is disbursements for the contractors to continue doing their work.”

The minister urged all stakeholders to continue to collaborate to ensure full delivery of the project at the targeted period.

READ: NNPC will export natural gas to Europe, as European refinery closures favour Nigeria

READ: Port Harcourt Refinery to get a facelift in Q1 2021 – NNPC

What you should know

The project which is reputed to be the single biggest gas pipeline project in Nigeria’s history is expected to move gas between the southern and northern parts of the country and will eventually extend to North Africa.

The 614 km gas pipeline project will be in three phases:

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  • The first phase is 200 kilometres long and is between Ajaokuta and Abuja, at a projected cost of $855 million.
  • The second phase is 193 kilometres long, between Abuja and Kaduna. It is estimated to cost $835 million.
  • The third phase is 221 kilometres-long, between Kaduna and Kano, at a projected cost of $1.2 billion.

READ: Tayo Oviosu, the journey from Software Engineer to Pagatech

READ: NNPC to begin gas pipeline construction by Q2 2020

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Energy

FG committed to ending estimated electricity billing – Deputy Senate President

The Deputy Senate President has said that the FG is committed to increasing economic productivity through power.

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The Deputy Senate President, Ovie Omo-Agege has assured Nigerians that the federal government is committed to ending the era of estimated electricity billing, citing the mass metering programme initiated by the government.

The Senator disclosed this at the breaking ceremony of the Power Sub-Station in Orogun constructed by Niger Delta Power Holding Company (NDPHC) and National Integrated Power Project (NIPP), Ughellli North Local Government Area of Delta, on Saturday.

What the Senator said about ending mass metering

“I remind the Benin Electricity Distribution Company (BEDC) of its obligation to customers and the government regarding the mass metering initiative of the Federal Government aimed at ending the era of estimated billing syndrome,” he said.

“That is what President Muhammadu Buhari and members of the National Assembly want.

All over the world, you pay for the energy you consume. The only obligation government has is to provide the enabling environment for it to be made available,” Omo-Agege said.

READ: How to reduce your electricity bill in Lagos

He disclosed that the FG  will introduce more power-related policies when the implementation of the 2021 budget begins, as the FG is committed to increasing economic productivity through power.

“The objective has been to ensure that the number of people who use modern energy should increase to reduce social cost than to increase social benefits. The establishment of this power sub-station is one of the several initiatives of this administration aimed at addressing the energy poverty in our nation,” he added.

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READ: Buhari moves against DISCOs that collect money for prepaid meters

What you should know

Recall Nairametrics reported in March that the Central Bank of Nigeria (CBN) has disbursed N123.34 billion to Distribution Companies (DisCos) to boost electricity supply in the country for the procurement of meters and other equipment needed to improve power.

CBN disbursed N33.45 billion to nine DisCos for the procurement of 605,852 meters, while N89.89 billion was disbursed under the Nigerian Electricity Market Stabilisation Facility (NEMSF 2) to 11 DisCos to improve electricity supply in the country.

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Columnists

What FGN Free Meter Program means for the power sector

Without effective penalties for erring DisCos and consumers, progress may still remain very slow.

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Electricity, Buhari moves against Discos and agents that collect money for prepaid meters

According to news reports, the Minister of Power, Mamman Saleh on Wednesday said the distribution of the four million free electricity prepaid meters pledged by the Central Bank of Nigeria would soon begin across the country.

According to him, the government is wrapping up the distribution of its initial one million meters, which he labelled phase zero, and would soon begin the distribution of the four million sponsored by CBN, which he tagged phase two. He also noted that the Federal Executive Council approved N3bn for the execution of six major electricity projects in the country to upgrade Nigeria’s electricity facilities and improve power supply across the country.

Ineffective metering remains a major drawback to the success of power sector reforms in Nigeria. While some consumers avoid paying for power consumed through meter bypass, some other consumers are made to pay for what they have not consumed through estimated billing by DisCos.

DisCos have been largely unsuccessful with metering their customers.

As far as inadequate metering is concerned, DisCos over time, have used this situation to their advantage via estimated billings. It appears that fully metering customers are currently being viewed as a disincentive, given that estimated bills can easily be manipulated.

According to a report by the Nigerian Electricity Regulatory Commission (NERC), only 4,234,759 (40.27%) of the total customer population of 10,516,090 were metered as of 30 June 2020. Clearly, this validates the widely held view that there are a wide number of customers on estimated billing which gives room for illegal connection to the networks and in turn corrupt practices. NERC further revealed that only three out of 11 Electricity Distribution Companies in the country had metered more than 50% of electricity customers under their coverage areas as of June 2020.

Effective metering in our view is one step ahead in solving the myriad of problems embattling the Nigerian power sector. Though supposed to be unpaid for, many customers in a bid to avoid the bureaucracy associated with getting meters have paid to get their own meters. We believe the provision of meters to all end-use customers will go a long way in ameliorating the liquidity squeeze in the power sector whilst also providing cashflow to the DisCos for investment in equipment needed to evacuate unused electricity to consumers nationwide.

We laud the FG’s efforts at distributing meters freely to end-users, but we note that without effective penalties for erring DisCos and consumers, progress may still remain very slow.

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CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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