Nigeria completes about 2/3 of pipeline worth $2.5 Billion after China snub

Nigeria has completed about two-thirds of a pipeline that will transport gas produced in the south of the country to the power-deprived north, the state energy company said.

While the 614-kilometer project is progressing slower than originally anticipated, the Nigerian National Petroleum Co. has spent more than $1 billion on it and remains committed to the development, the company’s chief executive, Mele Kyari, told reporters on Monday. An article in the Lagos-based Guardian on April 19 had said construction had stalled due to a lack of available financing.

“We are continuing to fund it despite the fact that we do not have third-party financing on this project,” Kyari said during an inspection of building work. “We have so far spent over $1.1 billion on this project from our cash-flow.”

While the Nigerian government initially negotiated the bulk of the funding for the $2.5 billion project with Chinese lenders headed by the Bank of China, that deal was not finalized.

The contracts were awarded in late 2017 but construction did not begin until mid-2020. About a year ago, the NNPC said it planned to finish the project before President Muhammadu Buhari leaves power at the end of May. The pipeline is the first part of an ambitious proposed trans-Sahara link to Europe via Algeria.

The pipeline that will travel from the central Kogi state to the trading hub of Kano is intended to increase domestic consumption of gas and boost supply to energy-starved industries in the northern part of the country.

Nigeria has Africa’s largest proven gas reserves estimated at about 200 trillion cubic feet, most of which is untapped, flared or reinjected into oil wells.

Around 70% of work on the main line and about 50% on the overall project has been finished, Seyi Omotowa, managing director of the NNPC’s gas subsidiary, said in an interview on local broadcaster, Arise News, on Tuesday. Progress on three power plants that will be fed by the pipeline “are coming at a different pace,” he said.

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