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NNPC blames paucity of funds for 3rd party financing model

By Michael Eboh
The Nigerian National Petroleum Corporation,NNPC, yesterday, disclosed that its decision to adopt third-party financing for its pipeline and other facilities development in recent times was because of the funding challenges currently prevalent in the country.

Group Managing Director of the NNPC, Dr Maikanti Baru

The NNPC, in a statement in Abuja, explained that the contractor- financing model had enabled it to aggressively build the pipeline infrastructure within the Gas Master Plan as exemplified in the recent award of the Ajaokuta-Abuja-Kaduna-Kano (AKK) gas pipeline and all ongoing downstream pipeline infrastructure rehabilitation effort.

According to the statement, Group Managing Director of the NNPC, Mr. Maikanti Baru, represented by Chief Operating Officer, NNPC Ventures, Mr. Babatunde Adeniran, stated this at the Nigerian International Pipeline Technology and Security Conference, NIPITECS 2018, in Abuja.

Baru wondered if Nigeria had a financially capable environment that could provide funds at rates that would be competitive and low enough to produce adequate returns.

He averred that the answer to these posers would enable NNPC restructure and develop policies that would encourage infrastructure development in the country.

Baru further stated that pipeline remained the cheapest way of moving products across any distance, noting however that pipeline operation and construction in Nigeria had been an expensive undertaking.

He challenged members of the Pipeline Professionals Association of Nigeria, PLAN, and other stakeholders to proffer solutions that could lead to a dramatic change and expansion of pipeline business in Nigeria.

Baru said such solution must be able to resolve the challenge which had hindered the growth and viability of pipeline venture in the country.

He explained that emphasis should not be on what has been done in the past but to seek quicker, better, cheaper and more effective ways of how things should be done to achieve the feat.

‘’The poser I will like the conference to address is: Is cost really an inhibitor or is it the security challenges or financial models that are not properly structured and above all how do we make the pipeline business a financially viable investment?’’ he said.

Continuing, he noted, “How do we build partnership with the required technical expertise to assemble new technology based-industries that are cheap to operate and can deliver products that are both locally and internationally marketable?”

Earlier in his welcome address, Mr. Geoff Onuoha, Chairman of PLAN, assured that the pipeline professionals would not only pick up the gauntlet and tackle the challenge posed to the group by the NNPC, but would continue to work with other stakeholders to ensure the in-country viability of pipeline business.

Mr. Chidi Izuwah, the Acting Director General/Chief Executive Officer, Infrastructure Concession Regulatory Commission, commended the NNPC for embracing the contractor-financing model in the AKK project, noting that such an option should be replicated wholesomely in respect of other mega industry projects.


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