The developer of the first floating liquefied Natural Gas (FLNG) facility in Nigeria, UTM Offshore Limited, plans to have a Final Investment Decision (FID) on its FLNG project by the fourth quarter of 2024. It is expected that by lowering gas costs, raising foreign exchange profits, generating employment, and accelerating GDP growth, this investment would improve Nigeria’s energy security. This advancement would move the nation closer to realizing its potential in the gas of decade. It is also anticipated that its performance will have an impact on additional gas utilization investments, which are crucial to the Presidential CNG initiative’s success and to lowering Nigeria’s transportation-related carbon footprint.
This project will also encourage the use of clean cooking by boosting local production of liquefied Petroleum gas (LPG). Julius Rone, CEO of UTM Offshore Ltd states that the firm is ready for FID and plans to produce 2.8 million metric tonnes of liquid natural gas (LNG) by the fourth quarter of 2028, alongside 450 metric tonnes of LPG and other liquids yearly for both domestic and Export use. The project would give Nigerians access to affordably priced gas for use in their homes, cars and industries. It will also create jobs and business opportunities.
Thorough environmental and safety procedures are required.
Reducing the country’s long standing heavy dependence on oil, diversifying the country’s energy mix, increasing natural gas availability, minimizing supply disruptions, and improving energy stability highly require the successful development of the FLNG project. Nigeria has natural gas reserves of over 200 trillion cubic feet, which might generate significant profits from exports as the demand for liquefied natural gas is predicted to increase globally by more than 50% by 2040. The country needs to take advantage of this opportunity, since higher export Revenue will support a stronger Trade balance and improve the country’s standing financially on the global scene.
Energy experts Ayodele Oni and Joshua Olorunmaiye, highlight the project’s capacity to spur Economic Expansion and meet the Infrastructure requirements of the gas industry. To ensure the project’s success, they emphasize the necessity of thorough environmental and safety procedures as well as the need for efficient Logistics and transportation networks. The FLNG plant will help the country’s commercial and economic balance by enabling gas exports without the need for substantial onshore infrastructure. The initiative offers quick, economically viable, and Eco-friendly ways to monetise offshore stranded gas fields and associated gas. It also complies with Nigeria’s clean energy objectives.
FEED contract for the project has been awarded.
Furthermore, gas from Nigeria’s offshore Yoho field will be processed by UTM’s Offshore FLNG project. Reducing Gas Flaring and monetising reserves are the intended objectives of this project. It is anticipated that the FLNG unit will produce 1.81 to 2.72 million metric tonnes per annum (MTPA) of LNG once it is operational. More than 300,000 metric tonnes of cooking gas (LPG) will also be generated specifically for the local market. With the FLNG project anticipated to start operation by 2027, Construction and commissioning are scheduled to commence after the FID.
Technip Energies and Japan’s JGC Corporation have been awarded the front-end engineering and design (FEED) contract for the project. These companies are in charge of the intricate engineering and design, with a particular emphasis on the topsides, mooring system, and hull. The owner’s engineer, U.S. based KBR, has been chosen to oversee and make sure the project complies with the required standards and best practices. The FLNG hull will be built by a Chinese shipbuilder under subcontract by Technip Energies and JGC, who will also incorporate the topsides. Cosco Shipping (Qidong) Offshore and China Merchants Heavy Industry are competitors for this contract.
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A shareholders agreement was signed between NNPC, the government of Delta State and UTM Offshore. While NNPC owns 20% of the project’s equity, the Delta State government owns 8% and UTM Offshore remains the majority owner of the project with 72%. UTM Offshore also partner with the African Export-Import Bank (Afreximbank) to raise up to $5 billion for the FLNG unit’s construction, which covers about $2 billion for the first phase of the project. Nigeria’s plan to market its gas resources and promote Economic Growth is consistent with the project’s development.