Nigeria is about witnessing a new era of Liquified Natural Gas (LNG) industry growth and across the region as the demand for energy continues to increase, following UTM Offshore agreement for the Front-End Engineering Design (FEED), of its LNG Floating project.
The agreement will kickstart construction for Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility with engineering firms KBR, JGC Corporation and Technip Energies on November 16 in London.
With first production from the $1.8 million FLNG facility anticipated before 2027, UTM Offshore’s FLNG project will unlock opportunities in the LNG space.
Having signed an agreement to co-finance the development with the African Export-Import Bank earlier on, UTM Offshore’s signing of the FEED will move the development of the massive FLNG project from the fundraising stage to the implementation phase with parties involved, including, NNPC Limited and ExxonMobil, in the OML 104 block development, seeking to fast track the development, exploitation and monetisation of stranded gas resources to ensure energy security, access to energy and clean cooking and industrialisation in Nigeria, across the region and abroad.
The African Energy Chamber (AEC), as the voice of the African energy sector, strongly supports the development and commends UTM Offshore and its partners for the milestone.
With factors such as the Russian-Ukraine war, increases in energy demand and global energy transition-related policies fueling the energy crisis at global scale, the AEC strongly believes African gas has a huge role to play in liberating global economies and the global energy market.
“UTM Offshore CEO, Julius Rone has been a true champion of gas in Nigeria and Africa. His resilience, patience and outside the box thinking with a savviness to bring so many world-class companies and service providers to this project is extraordinary. We commend Afreximbank’s President Oramah for making this project a reality,” stated, the executive chairman of AEC, NJ Ayuk.
Moreover, as Europe seeks alternative gas suppliers as the bloc diversifies energy supplies away from Russia over the war in Ukraine, Nigeria – with its vast gas reserves estimated to be above 270 trillion cubic feet (Tcf) – is well positioned to expand its supply to Europe and UTM’s FLNG facility will be an enabler of industry expansion and Nigeria’s best practice to address some of critical gas industry challenges including cost, environmental sustainability, political risk and infrastructure development timeframes.
ExxonMobil and NNPC as feed gas suppliers, UTM Offshore as the LNG producer and Vitol as the LNG buyer, will leverage the FLNG facility to exploit 2.2 Tcf of proven gas reserves within OML IO4 over a period of 20 years, a development that will maximize Nigeria’s gas monetization for economic and gross domestic product growth.
