Advertisement
Advertisement
China-Africa relations
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
The US$2.8 billion Chinese-funded Ajaokuta-Kaduna-Kano gas pipeline project will carry natural gas between the southern and northern parts of Nigeria. Photo: Handout

Work begins on Nigeria’s China-funded US$2.8 billion gas pipeline

  • President Muhammadu Buhari says project is dear to the Nigerian people and must succeed at virtual launch via video link
  • The 200km first phase is expected to be completed in two years and revitalise the country’s industries

Nigeria has started construction of a US$2.8 billion Chinese-funded pipeline that will boost energy supply in a country dogged by power shortages, despite being Africa’s largest oil and natural gas producer.

The project – launched on Tuesday by President Muhammadu Buhari with a virtual flag-off via video link – will be Nigeria’s biggest domestic gas transmission infrastructure and is expected to revive moribund industries along its route.

Buhari said the Ajaokuta-Kadana-Kano (AKK) pipeline would provide gas for electricity generation and for the development of gas-based industries. Nigeria currently generates less than 7,000 megawatts – not enough to power its households and heavy industries.

China’s loan write-offs ‘does not fix Africa’s bigger debt crisis’

The AKK pipeline is the first section of the 614km Trans-Nigeria Gas Pipeline (TNGP), which has the financial backing of Chinese banks and China Export & Credit Insurance Corporation (Sinosure) and will add 3,600MW to the national grid.

Sinosure is providing insurance cover for 85 per cent of the total cost, estimated at US$2.89 billion. Nigeria is borrowing US$2.6 billion from the Bank of China at the Libor (London interbank offered rate) plus 3.75 per cent, for 12 years.

The remaining US$434 million will come from the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

Two consortiums of Nigerian and Chinese companies will construct the pipeline – Brentex/China Petroleum Pipeline Bureau and Oilserve/China First Highway Engineering Company.

“I would like to commend the government of the People’s Republic of China, our financiers and contractors for your support to deliver this important project,” Buhari said.

“This project is dear to the people of Nigeria and it must succeed. I challenge our private sector to lead the charge in maximising our gas resources to create a petrochemical hub that will resurrect not only our manufacturing capacity but place us squarely on the path to increased self-sufficiency.”

Pandemic takes the shine off China’s Belt and Road Initiative in Africa

Buhari said Nigeria should learn from Gulf countries with similar levels of gas reserves and had “a strategy centred around gas-industrialisation as their foundation towards export diversification”.

Nigeria is the world’s seventh largest producer of natural gas, sitting on about 180 trillion cubic feet of natural gas deposits.

NNPC said the pipeline would transport 3,500 million metric standard cubic feet of gas per day from several gas projects in southern Nigeria to the north, revitalising the country’s textile industry along the way.

The 200km AKK pipeline, between Ajaokuta and Abuja, is expected to be finished in two years and cost $855 million. Phase two, at an estimated $835 million, will run 193km from Abuja to Kaduna while the $1.2 billion third phase will extend the pipeline from Kaduna to Kano.

China finds manufacturing opportunities in low-wage Africa

The TNGP pipeline will eventually reach North Africa, forming part of the broader 4,400km Trans-Saharan Gas Pipeline which will export natural gas to customers in Europe.

China has invested billions of dollars in Nigerian infrastructure – Africa’s most populous country with about 200 million people and the continent’s second largest importer of Chinese goods.

In 2018 Nigeria bought US$13.5 billion worth of goods from China, selling US$1.86 billion worth of products in return.

Many of China’s investments in the country are part of its Belt and Road Initiative – Chinese President Xi Jinping’s trillion-dollar pet project that aims to boost trade and investment across Asia, Africa and Europe.

China funded and constructed a 186km railway between Abuja and Kaduna and another rail line linking Lagos and the northern city of Kano. Beijing has also built the international terminals for Nigeria’s four largest airports.

Post