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    NNPC Dismisses Claims of $1.5bn Cost Overrun at AKK Pipe


NNPC says the claims are "baseless, false and malicious."

by: Joe Murphy

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NNPC Dismisses Claims of $1.5bn Cost Overrun at AKK Pipe

Nigerian National Petroleum Corp (NNPC) has dismissed allegations that the budget of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline was inflated by $1.527bn, it said in a statement shared on its website.

The national oil company was responding to a report by Nigeria's online Point Blank News on September 7, which claimed that the Bureau for Public Procurement (BPP) had uncovered evidence of major corruption at the project. NNPC inflated the cost of pipes from $513 to $3,000 per metre, the report alleged.

NNPC said the claims were "baseless, false and malicious" and it is considering taking legal action against the news agency. It said that BPP, which has not commented on the allegations, had concluded that the pipe costs were reasonable. The project underwent "a transparent and open competitive tender process" where the most competitive bidders were selected, the company said.

"Approval of all relevant authorities were obtained after an intense scrutiny by the various agencies," NNPC said. "This is a deliberate attempt to mislead the Nigerian public with baseless information."

The 614-km AKK pipeline will carry up to 56mn m3/day of gas to power generators in the states of Abuja, Kaduna and Kano, enabling Nigeria to boost the share of gas in its energy mix. Construction was due to begin in the first quarter but has been delayed because of the coronavirus pandemic. It finally kicked off at the start of July.

The engineering, procurement and construction contractors hired for the project were Nigeria's Oilserv, Oando and Brentex Petroleum Services, and China's First Highway Engineering and China Petroleum Pipeline. China Export and Credit Insurance Corporation Sinosure has agreed to underwrite up to 85% of the cost of the AKK project, estimated by NNPC at $2.6bn.