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Non-delivery of pipes delays Nigeria’s East-West gas pipeline project

By on December 16, 2015

The Chairman and Chief Executive Officer of Oilserv Limited, Mr. Emeka Okwuosa has raised the alarm that the non-delivery of pipes by a contractor has delayed the early completion of the Ob/Ob 3 East-West gas pipeline project being executed by his company.

The East –West gas pipeline, 120 kilometres x 48 inches pipeline network is the largest to be built in Nigeria with a capacity to evacuate two billion cubic feet of gas from the eastern part of the country to fire power stations in the West, Kogi and northern axis.

Okwuosa told journalists in a recent interview in Lagos that the inability of another contractor to supply the pipes to be used by his company to execute the project had delayed the early completion of the job.

He said the project, which is being executed under the federal government’s Gas Master Plan, was supposed to have been executed as early as 2006, 2007 and 2008 but added that the job did not start until 2013, as the contract was only awarded by the end of 2012.

“If the gas master plan was religiously executed, by now we would have finished the other arms. It is a 128-kilometre pipeline and as we speak, the section, which is called Lot A, which is  64 kilometres that we are executing, is already 80 per cent done. By now, we should have finished that project but we had a setback and the setback came from the fact that some of the pipes that we are supposed to use in building the project was awarded to a different entity to procure. As we speak, we have not gotten some of the pipelines. The ones we procured by ourselves, we have already finished laying them. So, again, it is the way it was structured. But I can assure you that serious work is going on there. Before the end of 2016, most of the work would have been done,” Okwuosa explained.

“What is more important at the moment is the possibility of getting enough gas to fill up the pipeline. The pipeline is a huge pipeline – the largest pipeline to be built in Nigeria. It is a 48-inch diameter. Nowhere else in Africa does that pipeline exist. It has a capacity to carry two billion cubic feet of gas. As we speak now, NNPC is doing their best working with the operating companies – IOCs, local companies and producers to try to get enough gas to go into the pipeline because it is not just building the pipes but having enough gas to go in there,” he said.

“The bottomline is that the work is ongoing and the major impediment is not being able to complete it on time – that will be done, but the ability to get enough gas,” Okwuosa added.

The NNPC had initially faced the challenge of acquiring the right of way (RoW), for the gas pipelines and this also contributed to the delay in the delivery of the project.

Okuwosa had also raised the issue of briefcase companies, claiming to be setting up pipe mills just to secure pipeline procurement contracts in the name of Nigerian Content and cautioned that the trend could destroy the local content policy of government.

“Another issue is what is going on now, especially in pipeline EPC. I would like to be specific about this. There are few of us in terms of companies that have developed capacity; Oilserv has been in existence since 1995. We employ more than 500 people; we have built so many pipelines more than any indigenous company in Nigeria. But a situation where we know that most of the line pipes used here are not produced here and we know that most of them are imported, and then you have NCDMB setting up a system whereby you can qualify to bring in the pipes by signing an Memorandum of Understanding (MoU), and then you go and say that you have done ground-breaking for building a pipe mill – you do all those things and they give you a license to import pipes.

“And they told me, an EPC company that when I want to build a pipeline, I must buy only from those people, who have no capacity. I, as an EPC have more capacity. Why should I go and use a briefcase-carrying company, which has claimed that it is going to build a pipe mill for the past two years but nothing has happened. If I go and get that line pipe procurement company, they will still go overseas and buy those pipes at added cost, thus increasing the cost of my work. This is wrong and it has to be addressed; it is a scam,” he explained.

 

[ThisDay]