NNPC to activate $2.8bn AKK gas pipeline for export in 2026
Orisemeke Benjamin with Agency report
Group CEO NNPC Limited Bashir Ojulari has said that the company would activate its $2.8 billion Ajaokuta-Kaduna-Kano (AKK) pipeline for export early in 2026.
Ojulari said this during a recent tour of the project by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo.
Ojulari was accompanied by Executive Vice President (Gas, Power, and New Energy), of the company, Olalekan Ogunleye.
The AKK pipeline, first conceived in 2008, is central to Nigeria’s ambition to leverage its vast gas reserves for economic growth.
Its completion could transform the north, where chronic power shortages and a lack of energy infrastructure have stifled manufacturing for decades.
Ojulari, after briefing President Bola Tinubu on Sunday, noted that the company has completed welding the main line of the pipeline, including the critical River Niger crossing – a feat that has stalled progress for years.
The milestone, he said, has cleared the way for connecting the pipeline early next year. Ojulari said once activated, the project will “bring gas in its full form into the northern part of Nigeria.”
“This is not just about energy,” Ojulari said. “It’s about industrialisation – fertiliser plants, power generation, and gas-based industries in Kaduna, Kano, Abuja, and Ajaokuta. We expect to see industrial parks spring up.”
Ojulari also revealed NNPC’s production targets: oil output is expected to rise to 1.8 million barrels per day in 2026, up from about 1.7 million this year, while gas production will continue to climb.
He credited structural reforms under the Petroleum Industry Act for enabling NNPC to operate as a profit-driven company, no longer reliant on federal allocations.
Ojulari said President Tinubu reaffirmed his push for $30 billion in new investments by 2030 and oil output of 2 million barrels per day by 2027.
The NNPC GCEO noted that upon completion, the pipeline network will deliver economic opportunities, boost power supply, and drive national industrialization, ushering in a new era of energy and economic security for the country.
Meanwhile, President Bola Tinubu has approved the cancellation of a massive portion of the debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, wiping out about $1.42 billion and N5.57 trillion after the reconciliation of records between the two entities.
The decision was contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 meeting of the Federation Account Allocation Committee (FAAC).
The write‑off follows a comprehensive review of NNPC’s outstanding obligations, which had been reported at $1,480,610,652.58 and N6,332,884,316,237.13 for Production Sharing Contracts (PSC), Direct Sale Direct Purchase (DSDP), Revenue Allocation and Miscellaneous Crude Liftings (RA & MCA), and Joint Venture and PSC royalty receivables.
The Presidency has now cleared the bulk of these balances, with the NUPRC confirming that 96 % of the dollar‑denominated debt and 88 % of the naira‑denominated obligations have been “nil‑off”.
The cancellation is part of a broader effort to resolve long‑standing disputes over NNPC’s legacy indebtedness. The NUPRC noted that while the legacy debts have been largely cleared, fresh obligations incurred between January and October 2025 remain outstanding, totaling $56,808,752.32 and N1,021,550,672,578.87 for PSC & MCA liftings and JV royalty receivables respectively.
The commission has already passed the necessary accounting entries to reflect the debt relief in the Federation Account.
The decision has sparked debate over its fiscal impact. While the write‑off provides immediate relief to NNPC, it reduces the distributable revenue pool for the Federation Account, potentially squeezing allocations to states and local governments.
Analysts at Marketforces warn that the move could exacerbate revenue shortfalls at the sub‑national level, especially as the country grapples with rising public debt and fiscal pressures.
The World Bank has previously criticized NNPC for persistent gaps between reported earnings and actual remittances, urging stronger oversight and transparency in the management of oil revenues.
The bank also highlighted that NNPC has been remitting only 50 % of revenue gains from the removal of the Premium Motor Spirit subsidy to the Federation Account, underscoring the need for improved fiscal discipline.
The FAAC sub‑committee has directed NNPC Ltd and audit firm Periscope Consulting, which flagged an alleged $42.37 billion under‑remittance between 2011 and 2017, to meet jointly and harmonize records. This dispute remains unresolved, and the reconciliation process is ongoing.
President Tinubu’s approval to write off $1.42 billion and N5.57 trillion of NNPC’s legacy debt marks a significant step toward settling historical financial disputes, but it also raises concerns about short‑term revenue losses for states and the broader fiscal health of the federation.
