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NNPC set to conclude $2.5bn Chinese financing agreement for AKK pipeline

The Nigerian public oil company (NNPC) has announced that it will conclude by the start of the second quarter a financing agreement of 2.5 billion dollars which will be used to build the largest gas pipeline in the country, called AKK (Ajaokuta-Kaduna-Kano).

With a length of 614 km, the installation attracted the attention of Chinese lenders at the last summit on Sino-African cooperation in 2018.

The Chinese lenders had then issued a guarantee of financing for 85% of the project whose value total is $ 2.8 billion.

The funds are expected to be released by the Industrial and Commercial Bank of China (ICBC) and the Bank of China. Chinese export credit agency Sinosure will provide insurance coverage.

The AKK pipeline will cross the country to facilitate the supply of gas to thermal power stations. This will bring the electricity production capacity to more than 10,000 MW for better access of populations to electricity.

The pipeline will initially supply 2 billion cubic feet of gas per day but will have a maximum carrying capacity of 3.5 billion cubic feet of gas per day.

These new gas volumes will come from seven projects already under development. Construction of the pipeline will start before the end of this year. 

Source: Agence Ecofin