Connect with us

Investment

Investors Shun NNPC’s Planned Pipeline Project from Kaduna Refinery to Niger Republic

Published

on

Gas-Pipeline
  • Investors Shun NNPC’s Planned Pipeline Project from Kaduna Refinery to Niger Republic

The plan by the Nigerian National Petroleum Corporation (NNPC) to build a crude oil pipeline from the Kaduna refinery to Niger Republic may have hit the rocks, as investors have shunned the project because it is commercially unviable.

As part of efforts to address frequent disruptions to the supply of crude oil to the Kaduna refinery, arising from the Niger Delta militancy, the Group Managing Director of NNPC, Dr. Maikanti Baru had after bilateral discussions with the Minister of Energy and Oil of the Republic of Niger, Hon. Foumakoye Gado, confirmed that the federal government was planning to begin the construction of about 1,000km of pipelines to convey crude from the Nigerien oil field in Agadem to the Kaduna refinery.

To actualise this plan, Baru said NNPC would hold discussions with the Chinese firm operating the Agadem oil field located in the East Niger Rift Basin.

Though the spokesman of the corporation, Mr. Ndu Ughamadu had said discussions on the proposed project were still ongoing, investigations revealed that the project was not commercially attractive to investors.

Investigation gathered that the idea of building the pipeline was originally mooted by Chinese National Petroleum Corporation (CNPC), which had approached the Bureau of Public Enterprises (BPE) to acquire the Kaduna refinery around 2005 with a commitment to pipe crude oil to the plant from Niger Republic.

An official of NNPC said at the weekend that when CNPC found oil in Niger Republic, it approached BPE and offered about $103 million to acquire the Kaduna refinery during the privatisation exercise carried out by the Olusegun Obasanjo administration but their offer was rejected.

“Their financial bid was low because they also offered to build about 700 kilometres of pipelines from the refinery to Niger Republic and also use their money to rehabilitate the refinery.

“But the federal government informed them that NNPC already had a pipeline from Escravos to Kaduna. But they preferred to build their own pipeline because of the constant vandalism of the Escravos-Warri pipeline, which feeds the Kaduna refinery.

“When they could not buy the Kaduna refinery, they went back to Niger to build a small refinery,” he explained.

The official added that CNPC left Nigeria in March 2016, noting the crude pipeline from Kaduna to Niger was no longer attractive because the crude reserves in Niger are very small, while the low oil price environment had made the project unattractive.

“Besides, other investors are not favourably disposed to partner NNPC in the project because the project is not viable.

“When they consider the price of crude oil and the low reserves in Niger, and juxtapose this against the capex of building the pipeline and opex of maintaining the pipeline, the project seems commercially unviable.

“For political and market integration, it may look attractive, but it is not commercially competitive. Once the crude oil coming from Niger Republic is not in excess of 100,000 barrels per day, no investor will be willing to partner NNPC.

“The command and control era is over; it was the past military administration that conceived the Kaduna refinery but that era is over. We are in an era of market competitiveness. So the pipeline project is dead on arrival,” said the NNPC official, who spoke off the record.

A former top official of the BPE, Mr. Dan Kunle also confirmed yesterday that the Chinese firm had actually approached the privatisation agency to acquire the 110,000 barrels per day Kaduna refinery and build a pipeline to Niger Republic but the bid was rejected because it was considered too low.

“They (CNPC) offered about $100 million but BPE rejected their bid because Nigerians will cry blue murder that the agency has given out the refinery for a pittance,” he said.

“Actually, they offered to build a pipeline to bring crude oil from Niger so that after refining in Kaduna, Niger will take their own share. But the bid was rejected and I doubt any investor will embark on the project today.

“It was viable in 2004-2005 but it is no longer viable in 2017,” Kunle added.

Investigation gathered that CNPC and Niger had in 2008 signed integrated upstream and downstream deals on the Agadem field involving oilfield exploration and development, construction and operation of a long-distance pipeline and a joint venture refinery.

By the terms of the contract, CNPC would complete the first phase of construction and bring the oilfield, pipeline, and refinery into operation within three years.

The project was completed on schedule.

A Nigerian delegation had in November 2011 represented former President Goodluck Jonathan when Niger inaugurated the 20,000 barrel-per-day Soraz refinery near Zinder, close to the Nigerian border.
The refinery is 60 per cent owned by CNPC and 40 per cent by the government of Niger.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Investment

Saudi Arabia Aims for $80 Billion Tourism Investment to Fuel Vision 2030 Goals

Published

on

tourism

Saudi Arabia is embarking on a bold venture to attract up to $80 billion in private investment into its burgeoning tourism industry, a move pivotal to realizing its ambitious Vision 2030 objectives.

Tourism Minister Ahmed Al Khateeb unveiled the kingdom’s aspiration during an interview in Riyadh, emphasizing the imperative role of the private sector in spearheading investment endeavors.

With plans to disburse approximately $800 billion on tourism over the next decade, Saudi Arabia is steadfast in its pursuit to diversify its economy and reduce dependency on oil revenues.

Vision 2030 outlines a trajectory for the kingdom to metamorphose into one of the world’s premier tourist destinations, targeting 150 million annual visitors by 2030, a significant portion originating from overseas.

While the government and sovereign wealth fund have historically fueled tourism development, securing substantial foreign direct investment, particularly from the private sector, emerges as paramount in expediting Vision 2030 initiatives.

The kingdom’s fiscal projections, forecasting deficits until 2026, underscore the urgency of engaging private investors to actualize the ambitious tourism blueprint.

Saudi Arabia, having welcomed 100 million tourists in 2023, predominantly domestic travelers, eyes international markets such as India, China, the UK, France, and Germany for tourist influx.

A new program launched by the Ministry of Tourism aims to streamline investment processes, potentially unlocking $11 billion in private investment, bolstering Saudi Arabia’s tourism trajectory and reshaping its economic landscape.

Continue Reading

Treasury Bills

CBN Unveils Plan to Settle N1.64 Trillion Treasury Bills in Q2 2024

Published

on

FG Borrows

The Central Bank of Nigeria (CBN) has announced its strategic approach to managing liquidity and meeting financial obligations by unveiling a comprehensive plan to settle Treasury Bills (TBs) worth N1.64 trillion during the second quarter of 2024.

This initiative, part of the CBN’s Nigeria Treasury Bills Issue programme, aims to regulate the money supply within the economy while effectively managing liquidity dynamics.

According to documents obtained by Investors King, the TBs settlement program is slated to commence on March 7th and conclude on May 23rd, 2024.

The CBN will focus on settling TBs with varying tenors, including N414.29 billion on 91 days, N43.74 billion on 182 days, and a substantial N1.18 trillion on 364 days.

The breakdown of the settlement plan reveals monthly settlements to address maturing TBs. In March, the CBN plans to settle N660.62 billion worth of TBs, followed by N292.17 billion in April and N688.3 billion in May.

Market analysts interpret this move as a testament to the CBN’s commitment to managing financial obligations and maintaining economic stability.

It provides investors with opportunities to engage in short-term financial instruments while contributing to overall liquidity dynamics.

The strategic settlement plan reflects the CBN’s proactive stance in navigating economic challenges and ensuring stability within the financial landscape.

As the apex bank implements these measures, stakeholders will closely monitor their impact on market dynamics and economic indicators, anticipating implications for investment decisions and monetary policy outlooks.

Continue Reading

Investment

China’s State-Owned Lenders Allocate $8 Billion to Revitalize Property Market

Published

on

General Images Of Residential Property

China’s state-owned lenders have committed a substantial $8 billion in loans to rejuvenate the country’s beleaguered property market, aligning with Beijing’s directives to bolster the sector.

Agricultural Bank of China Ltd. disclosed approving over 40 billion yuan of loans for real estate projects on predefined white lists, signaling a proactive approach towards supporting the housing market’s recovery.

China Construction Bank Corp. also joined the effort, extending 3 billion yuan to five property projects, with plans to greenlight over 20 billion yuan in loans soon.

Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. are among the institutions offering financing assistance, although the exact loan amounts remain undisclosed.

This initiative follows Beijing’s recent call for local authorities to enhance financing support for developers and curate lists of eligible projects.

In response, the big four state lenders pledged to meet reasonable financing demands from developers and projects identified under the coordination mechanism.

However, China’s property market faces challenges despite these measures. New home sales plummeted 34.2% year-on-year, underscoring the ongoing slowdown.

While existing home transactions surged during the Spring Festival holiday, new home sales remained subdued, prompting a cautious outlook among buyers.

The infusion of $8 billion aims to instill confidence and stimulate activity in the property sector, potentially heralding a gradual recovery amid persisting market uncertainties.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending