The Nigerian National Petroleum Corporation is closing a $2.5 billion financing deal with a Chinese lender for the pipeline project in Nigeria. The pipeline project would deliver 3, 600 megawatts (MW) of power and supply two billion standard cubic feet (SCF/d) of gas.
Group managing director of NNPC, Mallam Mele Kyari, dropped the hint in an interview with Bloomberg TV, saying that the Corporation had secured 15% owner financing from the Chinese firm, which is close to $430 million already, and that the Nigeria national oil company was expecting closure of 85%, which amounts to about $2.5 billion.
“As you mentioned, it is a pipeline contractor project that will deliver 3,600 megawatts of power at the first instance and also particularly supply two billion SCF/d of gas which is quite significant in the contest of our current situation. And of course, financing is everything. What we did is to get a Chinese company. It has been a long conversation and it is very close to financial closure.
“In the first instance, we have secured 15% owner financing; close to $430 million is on the ground in our account and we are expecting the closure of 85% which is about $2.5 billion. So, once that is closed we expect that the pipeline will be delivered on schedule.
“The financing will be closed in a maximum of six months period. We are adding 3, 600 megawatts of power from three captive power plants to be located in Abuja Kaduna and Kano. What that means is that you are going to add additional capacity which will spur up industrialisation in these locations with these power plants,” he told the station
He explained that the delay in the process of taking FID in the projects was owed to the issue of the fiscal environment that is not certain, as well as other issues with the Corporation’s partners. “What we did differently was to have some commercial closure in some of the disputes and we are very close to one of them.
“And once we are able to take FID on particularly the Bonga South West which will be very soon and then others will follow. And of course, that will open up new frontiers of opportunities in the deep offshore,” Mallam Kyari said.
According to him, Nigeria is ready to support the Organisation of Petroleum Exporting Countries (OPEC), in the oil cut deals, and in achieving stability in the global oil market. “Nigeria is a strong pillar in OPEC, and of course we did have issues with our production system which kind of saw us going down, production coming up without very clear determination.
“What is different today is that we can see some projector on our production. We are more stable now, and the environment is much more secure. And that means we can plan around our production. And that is why Nigeria came out to say we are going to comply with the reforming conformity. I don’t see any challenge doing that,” the NNPC boss said.
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