Energy Capital & Power

Market Report: NNPC GMD Confirms Progress of AKK Gas Pipeline

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The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari, stated that the construction of the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project is currently at 15% completion. The project is presently crossing the river Niger, through the Ndoni-Aboh river crossing in Rivers and Delta states which will deliver gas from the eastern part to the country into the western corridor according to the GMD. Alhaji Kyari further stated that the NNPC has the assurances of the government on the delivery of this transnational gas pipeline project, which will create a major gas trunkline for gas delivery to the domestic market. 

The Federal Government announced that China has approved and will disburse 85% of the loan required to fund the $2.6 billion AKK Gas Pipeline project. The AKK Gas Pipeline is a plan to transport natural gas from Ajaokuta, in Kogi State to Kano State, as part of the Trans Nigeria Gas Pipeline. Upon completion, the project will enable the injection of 2.2 billion standard cubic feet of gas per day (scf/d) of gas into the domestic market and facilitate an additional power generation capacity of 3,600 MW. Construction of the project commenced in July 2020. 

The Minister of State for Petroleum Resources, Chief Timipre Sylva commissioned two Liquified Natural Gas (LNG) plants in Kano State. Chief Sylva stated that the gas plants will generate 10 MW of electricity and empower the people of Kano State. The plants were constructed by Greenville LNG Company Limited for Aspira Nigeria Limited. The Chairman of Aspira Limited, Haruna Danzago, said the firm would extend the generated power to other factories through a bigger plant that would generate between 15-20 MW in the state. Also, the Managing Director of Greenville, Ritu Sahajwalla, said the storage tank’s capacity at both plants was 220 meters each. 


Modec has announced that its subsidiary Modec Senegal (MOSEN) has secured a contract from Woodside Energy to deliver operations and maintenance of a Floating Production Storage and Offloading (FPSO) vessel for the Sangomar field development phase 1 project offshore Senegal. The project is in the Sangomar Offshore and Sangomar Offshore Deep oil blocks. The FPSO will be deployed at the Sangomar field which is about 100 km south of Dakar.

The Sangomar field development is to be Senegal’s first offshore oil development. In January, Woodside and Modec signed a purchase contract for the supply of the FPSO. The contract will cover all in-country installation and commissioning activities, after which an initial 10-year operations and maintenance term will begin. Extension options are included for every year after the initial 10-year term for up to 10 more years. Scheduled for delivery in 2023, the FPSO vessel will be permanently moored at a water depth of approximately 780 meters by an External Turret mooring system to be supplied by SOFEC, a Modec company. The FPSO will be able to process 100,000 barrels of crude oil per day (BPD), 130 million scf/d, 145,000 barrels of water injection per day, and will have a minimum storage capacity of 1,300,000 barrels of crude oil. 


On Thursday 17 December, crude oil prices rose and reached a nine-month high, with traders optimistic about progress toward a U.S. fiscal stimulus deal and record-breaking refining demand in China and India. The U.S. West Texas Intermediate (WTI) crude futures were up by 0.8% at $48.17 a barrel, while Brent crude futures were up 0.6% at $51.38 a barrel by 11:20 AM ET (16:20 GMT). The Energy Information Administration (EIA) report for Wednesday 16 December showed a draw of 3.135 million barrels for the week ending Dec. 11, more than analysts’ expectations of a 1.9-million-barrel drop. 

Prices were supported by the further weakening of the dollar, which hit its lowest in over two and a half years overnight. A weak dollar makes it cheaper for buyers in emerging markets, which are the fastest-growing source of oil demand. The biggest factor underpinning hopes for 2021 demand remains the distribution of vaccines that will allow a speedy return to normal behavior by businesses and households. However, analysts warn that distribution issues will ensure that the impact on oil only comes with a delay. OPEC+ will also decide on January 4whether it can continue to increase production by 500,000 BPD in February. 

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Shuaib Van Der Schyff

Shuaib Van Der Schyff

A Digital Marketing Coordinator, and a Graduate from the University of Cape Town with a Bachelor of Arts Degree in Media Studies and English Literature.