Niger-Nigeria Pipeline: Katsina Landowners Set to Make a Killing
As experts differ on project
The recent decision by the federal government to construct 1000 kilometres of pipeline from Agadem, Diffa State in Niger Republic, has elicited mixed reactions from stakeholders, especially those at the border who are making a living out of the business
From From Yusha’u A. Ibrahim (Kano), Habibu Umar Aminu (Katsina) & Daniel Adugbo (Abuja)
Farmers in parts of Katsina State are predicting big fortunes should the Nigerian government go ahead with its plan to lay oil pipelines to convey petroleum products from Niger to the country, Daily Trust on Sunday has gathered.
However, some artisans in the state have expressed fears that the project, if realised, could put them out of business.
Recently, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, during a townhall meeting with the management and staff of the Kaduna Refining and Petrochemicals Company (KRPC) in Kaduna, stressed that efforts were ongoing to explore the possibility of piping crude oil from Niger Republic to be refined in KRPC. He added that President Muhammadu Buhari was personally committed to the project.
He told workers that it was important to explore alternative crude supply to the KRPC, which has been affected by vandalisation of pipelines and obsolescence. He assured that the initiative would reduce the downtime of the plant and ensure optimal utilisation.
Dr. Baru said, “Due to challenges with the aged refinery and crude oil pipelines that had been breached severally, the operations of the refinery have been epileptic. This we are determined to resolve through various intervention methods, including the evaluation of alternative crude oil supply from Niger Republic through building pipelines of over 1,000 kilometers from Agadem to Kaduna. That effort is being championed by Mr. President himself.”
According to him, the corporation has already started engagements with the Nigerien minister of petroleum and the Chinese that are operating the field at Agadem.
The announcement has generated high expectations among land owners in communities where locals expect pipelines to be channelled. When our correspondent visited Yar Mutum village in Mai’Adua Local Government, villagers informed him that they had been advised to keep their lands so that they could sell them for a lot of money when the project commences.
A farmer, Malam Aliyu, said: “We have been sensitised to keep our lands because we will soon use them to make money.” He said they were told that government would pay huge compensations to route the pipelines through their property.
But mechanics, other technicians and food vendors believe that the project would put them out of business.
“Just take a look at Tafa, Marabar Jos in Kaduna, these tankers stop over and business is booming. If they stop coming we will be thrown out of business,” a Nigerien national, Abu, who runs a tea shop at the border, said.
Although the pipeline project is yet to take off and there’s no detail on the proposed route, activities of land grabbers and speculators are high among residents. Investigation by Daily Trust on Sunday revealed that the prices of landed properties have slightly increased around the area.
How Nigerian marketers patronise Niger refinery
The Soraz Refinery, located at Zinder in Niger Republic, is fast becoming a hub for Nigerian oil marketers, especially those of northern extraction. This is because of its proximity and ease of doing business, as well as profitable returns on investment.
The 20,000 barrels per day (bpd) refinery is patronised by Nigerians, mainly for its twin products of diesel (AGO) and cooking gas (LPG). The refinery is about 200 kilometres from the Nigerian border of Kwangolam in Mai’adua Local Government Area of Katsina State.
Some of the major marketers cleared by the Department of Petroleum Resources (DPR) for the business included Rixon Energy; Safari Petroleum; Kjewel Gas and Petroleum; Himma Merchants; Whanu limited; One Ten Gas Limited; Bokir International Limited; Micpo Plc; A. A. Rano and AYM Shafa.
During a visit to the border, one would be greeted with numerous trucks waiting to move in or return from the refinery and head to their various destinations. Inquiries at the border, showed that an average of 165 trucks load daily at the refinery, out of which more than 130 come to Nigeria through Kwangolam. Out of this number, A.A Rano has the highest number of freight across the border, with an average of 30 trucks daily.
It was estimated that about 300 tonnes of cooking gas are imported from the refinery on a weekly basis. Despite the depreciation of the naira, business still booms at the refinery. And despite paying more than what they paid in the past, marketers still believe that Soraz is the place to patronise.
Our findings revealed that the wholesale price of diesel was N168 per litre in Niger last month (November). Every month, the price fluctuates, depending on transaction worldwide. A price template is issued every month in Niger. However, diesel sells between N190 to N200 in most Nigerian outlets. Cooking gas is N150 per kilogram in Niger Republic while it sells at N250 per kilogram in Nigeria. These two commodities are the most sought after from Soraz since they have been fully deregulated in the Nigerian market.
The recent decision by the federal government to construct 1000 kilometres of pipeline from Agadem, Diffa State in Niger Republic, has elicited mixed reactions from stakeholders, especially those at the border who are making a living out of the business.
For Bashir Himma of Himma Merchants, it is a good idea since one of the main reasons that forced him and others to Niger is its closeness. According to him, they prefer to patronise the place instead of going to Lagos and Port Harcourt.
“If you also take a look at the terrain, it is flat, solid and more secure, so we worry less about the state of our trucks. And there’s less fuel consumption when lifting the commodity. It saves a lot for business,’’ he said.
Himma further said the cost of transporting petroleum products from the southern part of Nigeria to the North was discouraging. “A truck consumes about 300
litres of diesel for a trip from Kano to Soraz, but a trip to Lagos, Calabar, Port Harcourt or any depot in the South will cost at least 1, 200 litres.’’
He said if the pipeline was constructed as planned, government would have less trouble moving the product to Kaduna refinery. “We were also made to understand that since the Kaduna refinery was built for heavy crude grade as that of Venezuela, which is similar to that of Niger with high sulphur, it would be good,’’ he added.
An agent, Umar Akamashirwa, believes that the plan is good and commendable, but certain considerations must be carefully looked at to avoid vandalism and sabotage.
“This is what is forcing the government to look elsewhere. My advice is that government should confront and address the issues before creating new ones in the North,’’ he said.
He said it would also be wise for government to think of using trucks to lift crude to Kaduna refinery. “This can go on simultaneously with the laying of pipelines, which I am sure will take more than two years. So lifting with trucks will speed up the process,’’ he added.
For Salisu Mohammed, a clearing agent, it is a move to put many people like him out of business and back to the labour market. He believes that the move can only be welcomed by few businessmen. He said the ease of doing business prompted many marketers to go to the refinery in Niger Republic, not for the sake of the closeness.
“In Soraz, marketers don’t have to wait for any government bureaucracy or nepotism, it is pay and carry, no delay,’’ he said.
The chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN) in Kano State, Alhaji Bashir Ahmad Danmalam, told Daily Trust on Sunday that the plan by the federal government to tap crude oil from Niger Republic to Kaduna refinery was a welcome development.
Danmalam said independent marketers were very much happy with the development and were ready to support government to achieve its objectives.
However, he suggested that to reduce expenditure, government should construct mini refineries in states that share borders with Niger Republic, from where crude oil could be refined and sent to various states.
“Government should invite businessmen that have interest in oil business like Alhaji Aliko Dangote to build mini refineries in states like Katsina and Jigawa. This will ease the transportation of the product from Niger Republic to Nigeria because the distance is not much,” he said.
He added that the plan would not affect their business negatively, noting that currently, many people have abandoned the business because of the risk involved.
He said: “Our drivers are being attacked
Government should invite businessmen that have interest in oil business like Alhaji Aliko Dangote to build mini refineries in states like Katsina and Jigawa. This will ease the transportation of the product from Niger Republic to Nigeria because the distance is not much
on their way to the South to buy the product. Sometimes these bandits will kill the driver and snatch the truck, but because we don’t have an alternative way of getting the commodity, we still have to go there.
“So, if we could have the product in Kaduna, it would minimise these risks and reduce the cost of transportation. To be honest with you, this plan would be a blessing to petroleum marketers, and we are ready to support the government to achieve this good objective.” The cost and benefits of the project Prof. Ibrahim Ali Mohammed-Dabo of the Department of Chemical Engineering, Ahmadu Bello University (ABU), Zaria, said if not for the constant vandalisation of crude lines in the Niger Delta region, there was no reason for the corporation to build the pipeline and import crude.
“I was initially against it, but if we have this pipeline, it would reduce vandalism. Another advantage of it is that crude thieves will not have access to market, like what you have in the Niger Delta. Up North here, where will they take it to (if they steal the crude)?” he asked.
The president of the Nigerian Association of Energy Economics (NAEE), Prof. Wumi Iledare, said while a lot of questions still needed to be asked, having the pipeline built would benefit the region.
“How are they going to pay them? Who would be responsible for funding the pipelines - Niger or Nigeria? Who are the investors?
“In an economic sense, the cost analysis is positive. It will generate a lot of employment in the North. The benefits of the refinery will be high,” Iledare said.
Also speaking, the secretary-general of the Association of Petroleum Inland Basin States of the North (APIBON), Engr. Yusuf Yabagi Sani, said although the plan was a short term solution, the NNPC could have given priority to developing inland basins in the North that could feed the refinery with crude.
He said, “I believe it is a short term solution. It is ill-advised because we have our own basins. Why not concentrate efforts on our basins because running pipelines on long distances has its own challenges. This fire-fighting arrangement cannot get us out of the problem.”
Sani advised the government to deal squarely with economic reasons that push people to vandalise pipelines.
Towards the end of 2014 when the Katsina State government and an American power generating company signed an agreement for a gas powered plant, using the Sabke dam in the area, locals held on to their properties. Under that arrangement, a gas pipeline was to be laid from the Soraz refinery to power the plant at Sabke. With this development, there has been an increased talk among the local communities.
The NNPC spokesman, Ndu Ughamadu, said the modalities for building the over 1, 000 kilometers from Agadem to Kaduna was being worked out, adding that it is still in its planning stage.
He said that once the plan was concretised, the corporation would make it open.
“One thing peculiar about the Kaduna refinery is that of all the three refineries in the country, it is the only one that uses two crude grades. When it was built, Nigeria was importing heavy crudes from Venezuela and Saudi Arabia.
“The plan to import crude from Niger Republic is not a new thing; all along we have been importing crude oil,” he said.
Asked if the NNPC was not taking the Boko Haram insurgency in the neighbouring Niger Republic into cognizance, Ughamadu said it would not be a challenge because the Nigerian military were in control of the situation.