Tag Archives: steel

$2.5bn secured for gas pipeline project..


Nigeria will close a $2.5bn financing agreement with Chinese lenders by the start of the second quarter of 2020 to fund the single biggest gas pipeline project in the country’s history, after months of holding talks with China on financing a project seen as being central to expanding gas output in the West African nation.

On completion of the 614km Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline, new gas-to-power plants will push power generation capacity to more than 10,000MW, in a country of nearly 200mn people that has faced perennial electricity shortages for decades. Africa’s biggest economy struggles with power output, generating less than 7,000MW. Three new captive gas-fired plants, to be located in Abuja, Kaduna and Kano, are expected to deliver 3,600MW of power.


The pipeline will also supply 2bn ft³/d (56mn ft³/d) of gas, in the short term to domestic customers, “which is quite significant,” according to Mele Kyari, group managing director of the state-owned oil company, Nigerian National Petroleum Corporation (NNPC).

Nigeria has 202tn ft³ of proven gas reserves and an additional 600tn ft³ of unproven potential resources. Despite having the largest gas reserves in Africa, only c.25pc of these reserves are currently productive.


“By March we will physically start constructing the pipeline” Kyari, NNPC

Construction of the pipeline will begin in February, or at the latest by March, after financing for AKK is secured, according to the NNPC chief. Developed by NNPC, AKK forms phase one of the Trans-Nigeria Gas Pipeline (TNGP) project, which is scheduled for commissioning in 2020. The TNGP project itself is part of the Trans-Sahara Gas Pipeline System that will ultimately link Southern Nigeria with customers in Europe.


The AKK pipeline project, which is being implemented using a build and transfer (BT) public-private partnership (PPP) model, is expected to transport 3.5bn ft³/d of dehydrated wet gas from multiple projects in the southern part of the country.

Nigeria had earlier secured 15pc international owner financing of c.$430mn and is expecting to close the remaining 85pc financing, amounting to c.$2.5bn, by the second quarter of 2020, according to Kyari. “We have got every condition required sorted out including the sovereign guarantee for us to go forward. As a matter of fact, we are moving to site in February at the latest and by March we will physically start constructing the pipeline. We have secured the financing both in terms of equity contribution and the clear indication that we will have 85pc financing from the Chinese. That is sorted out,” he says.

3.5bn ft³/d Total capacity of AKK pipeline

This financing deal takes Chinese investment in Nigeria’s oil and gas industry to nearly $20bn, according to figures from NNPC. Chinese investment, mostly from China National Offshore Oil Corporation (Cnooc), rose to $16bn last year, and the oil-dependent nation is seeking a separate $3bn to expand crude production to 3mn bl/d by 2023.


#Newsworthy..

2022: Ajaokuta steel set to begin full production – O.A


The Ajaokuta Steel Company will begin full production in 2022, the Minister of Mines and Steel, Olamilekan Adegbite has said.

He said the Russian Government, through the Russian Export Centre and the Africa Export-Import Bank (Afreximbank), is expected to commit $1.465bn to revitalize the moribund steel company.

Adegbite said the Federal Government was expected to sign a Memorandum of Understanding with Russia along with the two organisations – Russian Export Centre and Afrexim bank – by the end of this month.


While Afreximbank would provide $1bn, the Russian Export Centre would make $460m available to complete the long moribund project in the next two years.

Minister of Mines and steel, Olamilekan Adegbite, middle during a visit to the Ajaokuta Steel plant in November 2019


The minister spoke in Lagos on Tuesday at an interactive session with journalists on the developments in the mines and steel sector of the economy.

The Ajaokuta steel plant, conceived in 1976, was aimed at establishing a metallurgical process plant/engineering complex with other facilities.


It is on 24,000 hectares in Ajaokuta, 38km from Lokoja.

The company is meant to generate important upstream and downstream industrial and economic activities that are critical to the industrialisation of Nigeria.


The plant, tagged “Bedrock of Nigeria’s Industrialisation’’, is also designed to produce iron and liquid steel from mines at Itakpe, in Kogi, some 52km from Ajaokuta.

The project has achieved over 90 per cent completion and some of its sections are already operational.

An accord to revive the Ajaokuta project was reached at a meeting between President Muhammadu Buhari and Russian President Vladimir Putin in Russia in October.

If operational, the steel plant could provide nearly a million jobs for unemployed Nigerians.


#Newsworthy…

Update – FG restates commitment on Ajaokuta steel co.

The Federal Government has reaffirmed its commitment towards the resuscitation of Ajaokuta Steel Company in Kogi State.

Permanent Secretary, Ministry of Mines and Steel Development, Dr. Abdulkadir Muazu, who was represented by the acting Director, Steel and Non-Ferrous metals, Olasupo Kolawole, stated this at a workshop on stimulation and promotion of activities of Small and Medium Enterprises (SME’s) in the metal sector at the weekend in Ilorin.

“For the past two to three months, you will see the trend going on in the steel sector. The president and his entourage went to Russia two months ago for negotiation on how to bring Ajaokuta up. Underground work is ongoing. Hopefully, by January 2020 everything will be concluded by governments of Russia and Nigeria on how to bring Ajaokuta Steel Company to limelight again.

“If you look at Ajaokuta as an integrated plant comprising about 43 industries in one particular place, if Ajaokuta should come up, it will take care of West African countries by supplying them all types of steel products, including the local steel which will save us foreign exchange that we use in importing steel products.”

Muazu said the Ministry of Mines and Steel Development recognises SME’S as the engine of growth for the development of the metal industry.

He said SME’s contributes significantly to wealth creation, employment generation and increase in the nation’s Gross Domestic Product (GDP).

The minister also decried the harm done to the economy by the dependency on imported steel.

“Importation of metal products has lead to a major drain in the nation’s foreign exchange. We import all kinds of metal products, even those produced within the country, because the quality of products made in Nigeria are not comparable with those imported. The quantity of metal products made in Nigeria cannot meet the demand in the country. Imported products are also in higher demand in Nigeria due to the fact that they are cheaper.

“This trend has several negative implications which creates ripple effects, overwhelming poverty due to the folding up of SME’s which leads to several jobs lost.”

He said the workshop was organised to sensitize SME’s in the metal industry in Nigeria on their importance tot the sector. The workshop was also geared at explaining the role that the government is expected to play to help the growth of SME’s.

Acting Director, Steel and Non-Ferrous metals, Olasupo Kolawole expressed the delight that the programme was organised in Kwara State.

#Newsworthy…

FG promise, says Ajaokuta steel co. set to be resuscitated.

The Federal Government has reaffirmed its commitment to resuscitating the Ajaokuta Steel Company, assuring that the troubled state enterprise has not been neglected.

The Permanent Secretary, Ministry of Mines and Steel Development, Dr Abdulkadir Muazu, who was represented by the acting Director, Steel and Non-Ferrous metals, Engr Olasupo Kolawole stated this at a workshop on stimulation and promotion of activities of small and medium enterprises (SMEs) in the metal sector at the weekend in Ilorin.

Eng Kolawole said “for the past two three months now, you will see the trend going on in the steel sector; the President and his entourage went to Russia last two months for negotiation on how to bring Ajaokuta up. The underground work is still on going, [and] hopefully by January everything will be carried by the government of Russia and Federal Government of Nigeria on how to bring Ajaokuta Steel Company to the limelight again.

“Ajaokuta is an integrated plant comprising about 43 industries in one particular place. If Ajaokuta should come up, I believe the steel market in the whole of West Africa, Ajaokuta will take over; if Ajaokuta should come up, it will take care of all West African countries, supplying them all type of steel products, including the local steel which will save us the foreign exchange that we use in importing steel products.”

On local manufacturing, he said: “That is part of what we are doing now; the small and medium enterprises in that sector are very important… Ajaokuta is the upstream, while the lower is the downstream, the public contact with these lower downstream, we are trying to sensitise and promote them and what will improve their productivity in terms of operation, in terms of how to source for funds to carry out their operation,” he said.

Meanwhile, Dr Abdulkadir Muazu stated that “the Ministry of Mines and Steel Development, which is the organ of government responsible for ensuring the growth and sustainability of the metal sector in Nigeria, has recognized the SMEs as the engine of growth for the development of the metal industry in Nigeria. The SMEs contributes significantly to wealth creation, employment generation and increase in the nation’s Gross Domestic Product (GDP).”

Related: Firm promotes SMEs through business connect fair
“Importation of metal products has lead to a major drain in the nation’s foreign exchange. We import all kinds of metal products, even those produced within the country, because the quality of products made in Nigeria are not comparable with those imported and the quantity of metal products made in Nigeria cannot meet the demand in the country. Imported products are also in higher demand in Nigeria due to the fact that they are cheaper.

“This trend has several negative implications which creates ripple effects, [including] overwhelming poverty due to folding up of SMEs, which leads to several jobs being lost, importation continuously [being] increased and reduction of GDP. It is against the backdrop of this and the need to change this narrative that the Ministry of Mines and Steel Development initiated this project.

“The aim and objectives of this workshop is basically to sensitise the SMEs in the metal industry in Nigeria on their importance in the sector, the role the government is expected to play to help in SME growth, and strategies the SMEs can adopt to develop their business to be able to produce greater quantity and highly quality metals, so that metal products produced in Nigeria will be able to compete favorably with imported products.

“It is no longer news and I believe we are all aware that the Minister of Mines and Steel Development, Architect Olamilekan Adegbite, and the Minister of State, Dr Uchechukwu Ogah, declared the growth of the metal industry a priority, and the Ministry is ready to support metal production in Nigeria.

“A workshop was held recently to fashion out a downstream mineral policy to the consumption and utilisation of Nigeria’s locally produced metals,” he said.

Also speaking at the workshop, the acting Director (Steel and Non-Ferrous metals), Engr Olasupo Kolawole, said “this is the first time the Ministry of Mines and Steel Development is organising this programme in North Central and Kwara State, in particular.

“The Ministry of Mines and Steel Development initiated this programme in 2012 with the aim of creating awareness amongst the SMEs in the metal sector, comprising of foundries, fabricators, welders, manufacturers of spare parts, operators in aluminum extrusion and allied products.

“It is the vision, which is to facilitate the transformation of minerals and metal sector for sustainable industrial growth and economic surplus, of the Ministry to see these classes of operators in the metal sector fully integrated with other stakeholders in the industry.”

The Stimulation and Promotion Workshop is an annual event of the Steel and Non-Ferous Metals Department of the Ministry of Mines and Steel Development which is rotated amongst the six geopolitical zones of Nigeria. A sensitisation exercise was conducted by relevant officers of the department in November 2019 preparatory to this workshop. The exercise was to identify the metals sector SMEs in the selected states, inspect their operational processes and administer questionnaires to the operators to extract necessary information.

The information generated from the returned questionnaires provided the Ministry with the operators’ contacts, infrastructural needs, equipment requirements, operating capacities, and challenges faced. The database generated from the North Central Zone (B) will aid the Ministry in formulating favourable policies for the SMEs

Furthermore, the Ministry has also invited relevant reputable stakeholders/partners to make presentations on critical subject areas to improve the performances of the SMEs in the metals sector.

The invited resource persons will be addressing the operators on the following: Welding and Fabrication Technology with respect to SMEs in the metals sector, the Imperatives of Industrial Shop Floors Safety and Best practices the funding Challenges of SMEs and Strategies to Access Funding for SMEs in the metals sector and the Role of SMEDAN in Strengthening Metals Sector SMES for greater contribution to National GDP.

#Newsworthy…

Min. Of Mines And Steel – We Pray Ajaokuta Steel Company Begins Production By 2022…

The Minister of Mines and Steel Development, Mr. Olamilekan Adegbite, has said that with the progress made during the Russia-Africa Summit in Sochi, the Federal Government is praying that production in Ajaokuta Steel company should begin within the next two or three years.

President Muhammadu Buhari in October, met with President Vladimir Putin during the summit to discuss opportunities in exploring and expanding security, trade and investment, science and technology, and gas production.

The highlights of the meeting include putting Nigeria-Russia relations on a fast track and pursue the completion of partially completed and abandoned projects initiated by both countries.

Mr Adegbite who was a guest on Channels Television’s Politics Today gave more insight on the outcome of the meeting and what the mid-term expectations are about the Ajaokuta steel company located in Kogi state, which has gulped billions of naira by successive administrations since Nigeria returned to democracy in 1999.

The Minister explained that the Federal Government is looking at exploring the potentials of the mines and steel sector in its diversification drive, owing to what it can offer the country if properly harnessed.

He added that government in the past had adopted different methods, including the private and commercial sector to complete and ensure it produces steel, but all attempts have been futile.

“Government had tried in the past since Ajaokuta was completed to make sure that it produces steel; we tried with the private and commercial sector, but it never worked.

“We have tried using the private sector to kick-start Ajaokuta but it never worked, so we decided to go back to the original builders of Ajaokuta which was built by the Soviet Union in those days, particularly between Russian Federation and Ukraine, which is the request the President made to President Putin in Russia and he agreed on this government to government relationship to bring Ajaokuta back on stream.”

On the issue of funding, he revealed that support will be gotten from both the Russian Export Centre and the African Export-Import Bank (AFREXIM Bank), while adding that both governments are still studying the draft Memorandum of Understanding, with the hope that concrete steps will be taken afterward.

“We are at that point where both sides are understudying the draft MoU and we are hoping that before the end of the year or early January, we will be able to sign this MoU.

“Once that is done, it would kick-start the proper agreement with a Russian company, nominated by the Russian Government coming over to complete the works in Ajaokuta and we are praying that within the next two years or three, Ajaokuta should be able to produce,” he stated.

Mr. Adegbite added that the multibillion-dollar Ajaokuta Steel Mill, the largest in Nigeria, has a great chance and the agreement with the Russian government will make it work.

Ajaokuta steel construction started in 1979 by the Soviet Union under a corporation agreement with the Federal Government. The project reached 98 percent completion but is yet to produce a single sheet of steel to date.

In April, President Buhari rejected assent to a bill, Ajaokuta Steel Company Completion Fund passed by the eight National Assembly headed by Senate President, Dr. Bukola Saraki.

He explained that appropriating $1 billion from Excess Crude Account for funding the project as stipulated in the bill was not the best strategic option for Nigeria and such amount cannot be deployed, owing to the priorities given to other socioeconomic projects.

#Newsworthy…