UTM Offshore, the Nigerian National Petroleum Company (NNPC) and Delta State Government have signed a shareholders agreement in Abuja to develop Nigerias first Floating Liquefied Natural Gas (FLNG) project
Notably, the UTM FLNG project is the first of its kind to be developed by an indigenous private company in Nigeria, reflecting the strategic importance of the project and its impact on national energy security. UTM Offshore will take a 72% equity share in the project, with NNPC and Delta State holding the remaining 20% and 8%, respectively. The project will feature a capacity of 1.8 bn metric tons per year for domestic use and export and its Final Investment Decision – valued at US$2.1bn – is expected to be taken before Q1 2024, with construction to begin next year.
Speaking to the economic benefits of the project, Delta State governor, Sheriff Oborevwori, said, “Of particular interest to Delta State Government is the dividend that this UTM FLNG will generate, thus advancing the socioeconomic development of our great state… The project will also help to mitigate the environmental hazards in Niger Delta by reducing gas flaring… Another benefit we envisage with this project is that it will create job opportunities for our youths.”
Holding the largest proven gas reserves in Africa – 202 trillion cu/ft, to be precise – Nigeria requires substantial investments across its natural gas value chain, from upstream facilities to processing, power plants and associated infrastructure.
Under its National Gas Expansion Programme launched in 2020, Nigeria is seeking to expand its domestic gas network, boost gas-based industrialisation and eliminate gas flaring. The country has long been a hotspot for flaring due to a lack of financial incentives for oil producers to utilise associated gas. As a result, the Federal Government has mounted a concerted effort to reduce the practice of flaring, curb carbon emissions, and importantly, generate diversified gas-based industries and new revenue sources.