The development of Nigeria’s first floating LNG (FLNG) project has been marked by the signing of a shareholders agreement between Delta State Government, Nigerian National Petroleum Company Limited, and UTM Offshore Ltd. Dr Kingsley Emu, the Secretary to the State Government, and Omamuzo Erebe, the Solicitor General and Permanent Secretary Ministry of Justice, affixed their signatures representing the Delta State Government. Mele Kyari, the Group CEO, and Julius Rone, the Group Managing Director, signed on behalf of NNPC Limited and UTM Offshore, respectively.
This agreement ensures that the Delta State Government will possess an 8% stake in the project, whereas NNPC Limited will hold a 20% share, and UTM Offshore will have a majority stake of 72%. During the signing event held at the NNPC Towers in Abuja, Governor Sheriff Oborevwori of Delta State expressed that the UTM FLNG Project marks a groundbreaking achievement as the inaugural endeavour developed by a Nigerian-based private enterprise. The governor elucidated the rationale behind the state government’s acquisition of an 8% stake in the FLNG project, emphasising its profound significance for the national economy.
Socio-economic growth of the state will be enhanced with the initiative.
He further stated that Delta State, housing an impressive 40% of Nigeria’s confirmed gas reserves, renders this Investment not only righteous but also worthy. He stated that the agreement symbolised a momentous achievement in the progress of the venture, expressing optimism regarding the initiation of Construction in the coming year. He emphasized that the State government had a keen interest in the profits that would be produced by this UTM FLNG, as it would significantly contribute to the socio-economic growth of their esteemed state.
In addition, the domestic market is anticipated to receive a dedicated production of over 300,000 tons of LPG, widely known as cooking gas. The implementation of this initiative will not only contribute to the reduction of Gas Flaring in the Niger Delta, but it will also bring about substantial improvements in the overall well-being and health of the women in their community at large. By transitioning away from kerosene and firewood towards cleaner energy sources, they will experience a positive impact on their quality of life while simultaneously addressing environmental concerns.
Employment opportunities will be created for the younger population.
According to Kyari, the collaboration between them and the Delta State Government brings forth an additional advantage, which includes the creation of job prospects for the younger generation. This endeavour aligns with their MORE agenda, as they firmly believe in its four fundamental pillars. He further expressed his delight in partnering with the State Government on this promising venture. The government plays its role not only as a proponent of advancing gas utilisation nationwide but also as a participant in this essential sector, which holds promising prospects for everyone involved.
Ekperikpe Ekpo, the Minister of State Petroleum Resources (Gas), emphasised the urgent need for Nigeria to initiate the conversion of its extensive reserves of Natural Gas into a valuable asset for economic growth. Additionally, Julius Rone highlighted that the signing of this agreement represents a momentous achievement in the realisation of Nigeria’s inaugural domestic FLNG endeavour. Anticipating progress, he stated his optimism for the project’s Final Investment Decision (FID) to be reached by the conclusion of the second quarter of 2024.
Related Article: Nigeria, others lead Africa’s boom in FLNG
Lastly, he expressed his utmost appreciation to the stakeholders, particularly the State government, for their unwavering support in this endeavour. The commendation extended to the government specifically centred around their investment in this remarkable project. By taking an equity stake in it, the government demonstrated foresight and dedication towards generating additional streams of Revenue crucial for the development of Infrastructure within the state. Moreover, he emphasised the project’s potential to create employment opportunities for the numerous young individuals in the State.