Nigeria's foremost Online Energy News Platform

How BPP Settled Controversy Surrounding AKK Gas Project

-By Gideon Osaka

The dust raised concerning the Ajaokuta, Kaduna, Kano (AKK) gas pipeline project has finally been put to rest following the clarification from the Bureau of Public Procurement (BPP).

Prior to the clarification by BPP, there had been accusations and reports making the rounds that the Nigerian National Petroleum Corporation did not follow due process in the award of the contract.

The NNPC was also accused of inflating the price of the project so as to benefit from the inflated prices.

The report had alleged that the NNPC inflated the AKK gas pipeline contract to the tune of $1.527bn.

Alhaji Mamman Ahmadu, BPP DG

However, Director-General, Bureau of Public Procurement, Alhaji Mamman Ahmadu, clarified that the NNPC followed due process in awarding the Contract and that the contract amount was not inflated.

In fact, it is on record that the Group Managing Director of the NNPC, Mele Kyari had secured a $300m reduction in the Ajaokuta-Kaduna-Kano Gas project
Prior to securing the award of the project, there had been certain attempts by his predecessors in the last 13 years to commence project activities but it didn’t materialize.

However, being at the helm of affairs in just a year, the leadership of the NNPC under Kyari ensured that within 12 months of his tenure, the project came back to life.

This led to the award of the contract at a competitive price and eventual flag-off of construction that the world witnessed in June 2020.

The project which is expected to be completed within a 24-month timeline, is a section of the Trans-Nigeria Gas Pipeline with the capacity to transport about 2.2 billion cubic feet of gas per day

As such speaking on the development, the BPP Boss said the project was never inflated.
He said, “The person who spoke to you that mentioned that NNPC followed due process was the officer who reviewed the whole process.

“But after I read about it on the social media, I called on him to brief me on the relationship between the due process and what was carried on the social media.

“And he noticed a very big variation in what we did and that of the NNPC with what was on the social media.

“Then we went further to find out how they came about the information they disseminated, we saw that they picked the information somewhere else and used it in a manner that was meant to hurt what NNPC did.

“But, I think we are on top of the situation, we have our documents intact and it is available for scrutiny by anyone who is interested.

“The publication was not true from what I have already said, the publication is not reflective of what happened.”

Ahmadu urged investors to disregard such falsehood exhibited in the report, adding that the government is committed to transparency in all its dealings.

He explained that when completed, it would revolutionise the gas supply chain in the country.

Ahmadu noted that the project expected to be extended to other African countries, would help to further launch the country into global oil market.

He urged the NNPC to ensure the revival of the oil pipelines to help reduce the number of trucks that plied the roads.

Responding, the Group Managing Director, NNPC, Mallam Mele Kyari said that the NNPC would continue to ensure accountability as a public owned organisation.

On the AKK gas pipeline, he said that it was unfortunate that people would always want to spread false news to bring down government’s efforts.

He noted that the allegation on the project is malicious and pedestrian, adding that public scrutiny was good for business but should not be malicious.

“People should be responsible when subjecting government offices to scrutiny,” he said.

The NNPC boss said the Corporation would continue to follow due process according to the procurement law in the country.

He stated that the establishment of the BPP Act had encouraged the corporation to do more in line with its extant laws.

He said, “We are happy to be here, you will hear a lot but know that we will continue to do our best to be accountable, transparent in all we do.

“We are partners with the global Extractive Industries Transparency Initiative; everything we do is open to public scrutiny.”
Speaking on the state of oil pipelines, Kyari said that though there were still incidents of vandalism and criminality, efforts were still on to replace aged ones.

He said that the corporation was targeting two to three years to ensure replacement of some of the pipelines to enhance products supply.

In the same vein, speaking at a Webinar organized by Valuechain magazine on the AKK gas pipeline project recently, Managing Director of the Nigerian Gas Company (NGC), a unit of the Nigerian National Petroleum Corporation (NNPC), Mr Seyi Omotowa, gave assurance that the project would be realized in good time, adding that a presidential inter-agency project management team is working with other stakeholders to overcome all failure factors.
He declared that the AKK pipeline is an NNPC project while the project loan is hedged against the corporation’s revenue, with government providing the required sovereign guarantee.

He said the funding model, quality and pedigree of contractors, structures for transparency and accountability, as well as improved security arrangement would enable the AKK project management team overcome all foreseeable challenges and deliver the project in time.

Mr. Omotowa who gave the economic values of the pipeline stated that it is part of the national gas infrastructure blueprint designed to deepen the domestic, regional, continental market for Nigerian gas.