China National Petroleum Corporation nears deal on Nigerian gas pipeline
Industrial and Commercial Bank of China (ICBC) and Bank of China are expected to come in on the US$2.4 billion debt package for the pipeline intended to foster connectivity
China National Petroleum Corporation (CNPC) expects that the financing package will soon be in place for the Ajaokuta–Kaduna–Kano (AKK) gas pipeline project for the Nigerian National Petroleum Corporation (NNPC).
The 614 kilometre gas pipeline is expected to cost around $2.8bn, with 15% equity provided by the sponsors.
The pipeline is being built in stages, and contractors include a local consortium comprising Oilserve and Oando, as well a Brentex/China Petroleum Pipeline (CPP) Bureau consortium. CPP Bureau is a subsidiary of CNPC.
A high-level meeting between an NNPC delegation and and CNPC Management was held on the sidelines of the recent Forum on China-Africa Cooperation (FOCAC) Summit in Beijing.
Industrial and Commercial Bank of China (ICBC) and Bank of China, are expected to come in on the US$2.4 billion debt package, which will feature Sinosure cover.
The plan is to have a groundbreaking ceremony on the pipeline in October, by which time the debt financing needs to be in place.
The AKK pipeline project will enable connectivity between the different regions of the country. It will also enable gas supply to key commercial centres in the Northern corridor.
On the sidelines of FOCAC, several other deals were signed involving Chinese support for Nigeria.
NNPC signed a memorandum of understanding (MoU) in China with the China National Offshore Oil Corporation (CNOOC) towards developing Nigeria's oilfield services as well as boosting research and development in the oil and gas industry.
In addition, in a ceremony held at the Nigerian Embassy in Beijing on the sidelines of the ongoing Forum for China-Africa Cooperation (FOCAC) Summit, two separate MoUs on the biofuels project development were signed between: NNPC and the OBAX-COMPLANT Consortium, and NNPC and the CAPEGATE-NANNING Consortium.
The two will develop biofuels and establish biofuels complexes across Nigeria.
Speaking shortly after the signing, NNPC group managing director, Dr. Maikanti Baru, says MoUs were aimed at implementing the federal government's mandate on clean, alternative and renewable energy programmes, particularly automotive biofuels production nationwide.
"The aspiration for the exploitation of renewable fuel resources in Nigeria is to implement our nationally determined contributions to the Paris Agreement, part of which requires the blending of 10% by volume of fuel-ethanol in gasoline and 20% by volume of biodiesel in automotive gas oil (diesel) for use in the transportation sector," Baru says.
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12 Sep 2018