Nigeria’ state oil company awards Oando, Oilserv Ajaokuta-Kaduna-Kano gas pipeline project

By Afolabi Oluwaseun

A two-party consortium consisting of Oando Plc., in conjunction with its midstream affiliate, Axxela Limited (formerly known as Oando Gas & Power), and Oilserv Limited, has been awarded the engineering, procurement, construction (EPC) mandate for the Ajaokuta – Abuja portion (Lot 1) of the Ajaokuta-Kaduna-Kano pipeline system (AKK Pipeline) by the Nigerian National Petroleum Corporation (NNPC).

The contract award, according to a notification to The Nigerian Stock Exchange (NSE) Thursday, April 19, 2018, follows an extensive due diligence process conducted by the NNPC following a submission by Oando and Oilserv in 2013 in response to an Expression of Interest for a contractor-financed EPC development of the AKK Pipeline Project.

Jubril Adewale Tinubu, Oando’s group chief executive, and chairman Axxela, said: “Our longstanding achievements and aspirations in the gas and power sector are the testament to our desire to continuously provide innovative and integrated energy solutions across sub-Saharan Africa. The award of the Ajaokuta – Abuja portion of the AKK Pipeline Project also underscores our position as the partner of choice for investors, regulators, and key stakeholders as gas continue to gain prominence as a key driver for the region’s economic empowerment.”

The $727 million Ajaokuta-Abuja pipeline development is a 215km gas infrastructure with associated facilities such as metering/terminal gas station, pigging station, block valve stations etc.

The development of the AKK grid is a manifestation of the gas infrastructure blueprint in the Nigerian Gas Master Plan, which seeks to extend the existing gas transmission network and achieve connectivity between the East (gas reserves) and the North (demand centres); serve new customers in the Northern regions; and bridge the shortfall in the Western region.

“As forerunners in the sector, we remain actively committed to the long-term realisation of the Nigerian Gas Master Plan. The development of critical gas pipeline infrastructure and a far-reaching national grid remains pivotal to the country’s industrialization and economic empowerment. Consequently, the implementation of the AKK Pipeline Project will enable power-starved communities across the northern region have greater access to electricity, while providing stranded commercial and industrial customers with a cleaner and more efficient source of energy,” Bolaji Osunsanya, Axxela CEO, said.

In a bid to aggressively expand its operational footprint and further create value-adding opportunities in the gas and power space, Oando divested a portion of its erstwhile midstream vehicle, Oando Gas & Power to Helios Investment Partners LLP (“Helios”), a premier Africa-focused private investment firm. Oando Gas & Power subsequently rebranded as Axxela.

Axxela remains the pioneer developer of Nigeria’s foremost natural gas distribution network and the largest private sector gas distributor. The company is also extending its gas advantage to identified customers in neighbouring Benin, Togo, and Ghana with a target to deliver over 100 million standard cubic feet per day (“mmscf/d”) via its newly acquired shipper status on the West Africa Gas Pipeline to fuel power plants, commercial entities, and residential homes.

According to NNPC, awards for the three lots on the AKK Pipeline Project were made to three selected consortia to facilitate a timely delivery of the gas network.