Kaztech Engineering Limited, an indigenous engineering procurement contractor (EPC), has concluded plans to fast-track the completion of $158 million (about N23.7 billion)  gas transmission pipeline and  metering  station for the Adanga Power plant in Calabar, Cross River State.

The decision is a follow up to the progress recorded in the negotiation of gas sale-purchase agreement (GSPA) by  the Federal Government  and Addax Petroleum Development Company  to guarantee the supply of 100 million standard cubic feet per day (mmscf/d) of gas to the power station designed to generate 510 megawatts (MW) of electricity.  On conclusion of the negotiation, the GSPA will be the second of such agreements to be signed by government with power producers, the first being with Pan Ocean Oil and Gas Limited, which was signed in May.

The success of the deal and fulfilment of the contractor’s promise is expected to boost supply of electricity to the national grid  and improve electricity supply to industrial, commercial and residential consumers in the country.

The NIPP was unique because it is not located in a place but at seven locations across the country  expected to add  3874MW of electricity to the national grid. The projects were also initiated by the Federal Government to  support the spread of development  nationwide.

A source close to the ministry of petroleum disclosed  that the GSPA would soon be signed with Addax for the supply of 100mmscf/d for the firing of Adanga power plant awarded  under the National Integrated Power Plant (NIPP). The completion of the project and others being executed under the NIPP scheme had faced challenges of funding created by the legal action instituted by some state governors over the withdrawal of funds from the excess crude account  by the administration of former President Olusegun Obasanjo, militancy in the Niger Delta and construction of alternative bridges needed for the movement of turbines from the port to construction site.

Beside, contractors handling NIPP projects at a time were frustrated by probe instituted by the former House of Representatives Committee under the leadership of Honourable Ndudi Elumelu in 2008.

Investigation revealed that the success recorded by the negotiation team of the Federal Government and Addax has contributed to the decision of the indigenous  EPC contractor to move forward the completion date  of LOT3 Project Adanga-Calabar Gas Transmission Pipeline awarded to the main contractor, Marubeni Engineering (W.A) Limited   from June 2012 to 2011.

The EPC contractor also confirmed that the deal would help  to fast-track the completion of the  24-inch 107km gas transmission pipeline and metering station.

Speaking on the GSPA, the Executive Director, Kaztec, Mr Adebanji Babarinde, commended President Goodluck Jonathan and the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, for the success recorded with the initiative, saying “it has successfully sorted out the issue of gas pricing and gas supply to enhance generation and distribution of electricity in the country.”

Conducting journalists on a tour of the metering station now over 83 per cent completed in Calabar, Cross River State, Kaztec’s Project Manager, Mr Joseph Egona, said, “To this end, we shall commence offshore pipeline construction works by the end of September, in order to make the best use of the dry season window from October 2010 to February 2011 as earlier planned by us in our schedule.”

He further disclosed, “KAZTEC has also been awarded a contract by Addax for the TB-1921 installation works which include the Adanga Gas Platform where the offshore pipeline will hook up to.”

Egona also said that KAZTEC had acquired a pipe-lay/construction barge for the offshore installation to boost technical capacity, in line with its bid to become the company of choice in EPC services in the country.

“The pipe-lay barge will be utilised for the construction of the offshore pipeline segment. Efforts will now be geared towards fast-tracking the installation of the sensitive works related to the delivery of the gas for the LOT3 project,” he said.

Furthermore, he said the project also involved the construction of a 45km offshore pipeline

Mr Babarinde  listed the challenges facing the timely completion of the power plant to include “payment of compensation to host communities and getting payments for the work done; getting the Central Bank of Nigeria and the ministry of finance to issue letters of credit for the execution of the projects as at when due, as well as the adverse inflation often resulting to variations and avoidable and unnecessary delays over approval for these variations.”

Also speaking on the challenges of the gas pipeline, Mr Egona said the 510-megawatts power plant required about 140mmscf/d of gas and the company was currently negotiating with an indigenous gas firm for the supply of the balance of 40mmscf/d.

He noted that the gas pipeline had the capacity of 200mmscf/d to accommodate future expansion.

The civil engineer for the gas pipeline project, Mr Akenzua Agarose, noted that the original scope of work was expanded because 70 per cent of the land was swampy while only 30 per cent was normal, as such, Kaztec had to invest millions of naira in piling the site to the required level in preparation for the installation of the metering station.