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Two Opposing Views of the Controversial New $2.8 Billion Chinese-financed AKK Pipeline in Nigeria

Nigerian President Muhammadu Buhari launched production last week of a vast, new multibillion-dollar natural gas pipeline that will cross almost the entire country.

The 614-kilometer Ajaokuta-Kaduna-Kano (AKK) pipeline is one of Nigeria’s largest infrastructure projects to date and will be almost entirely financed by China. Together, the Bank of China and the state-owned insurance company Sinosure will cover 85% of the $2.8 billion budgetChinese contractors will also be involved in part of the construction.

Construction is expected to take about two years and when complete the new pipeline is expected to transport 3.5 billion cubic feet of natural gas a day from various gas gathering sites in Southern Nigeria.

The wet gas will be processed at Ajaokuta to produce Liquefied Petroleum Gas used largely for domestic cooking, while the remaining dry gas will be transported to supply feedstock for new power plants and petrochemical plants in Abuja, Kaduna, and Kano.

The Pros and Cons of the AKK Pipeline

  • PROS: “The [AKK pipeline] will also remain central to all aspects of Nigeria’s industrial development: boosting power generation, stimulating manufacturing activities and de-constraining new field development in the oil industry.” – Hamid Ayodeji  (THIS DAY)
  • CONS: “Experts are calling for cautious optimism over the $2.8 billion project, stressing that insecurity, economic viability, timing, global oil and gas market realities, the structure of Chinese loans, political factors, among others could undermine maximum benefits from the project.” — Kingsley Jeremiah (PREMIUM TIMES)

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