By William Emmanuel Ukpoju
In a significant milestone, the Federal Government of Nigeria has granted UTM FLNG Limited the “License to Construct” (LTC) for the country’s pioneering Floating Liquefied Natural Gas (FLNG) facility. This move unlocks a new economic chapter for Nigeria, Africa’s largest crude oil producer. The UTM Offshore Limited floating LNG facility, with an increased capacity of 2.8 million tonnes per annum (mtpa), will capture flared gas from ExxonMobil’s Oil Mining Lease 104 (Yoho field) located offshore in Akwa Ibom, southern Nigeria.
The Head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said that the project secured a license to build a 1.2mtpa in 2019. However, the project’s capacity was upgraded to 2.8mtpa “because of increased LNG demand in the market”.
UTM Offshore CEO, Dr Julius Rone declared that the engineering work for the plant is slated for completion in 2028, with production commencing in the first quarter of 2029. He further stated that the facility would supply 500,000 tonnes of liquefied petroleum gas to the domestic market, while the LNG produced would be earmarked for export.
Valuechain gathered that the plant is set to produce condensate alongside LNG and petroleum gas; while financing for the project’s first phase, amounting to $2.1bn, has been secured through Afreximbank, which also pledged $3bn for the second phase. UTM Offshore has completed plans with Japan’s JGC and KBR for the design of the project. Additionally, an off-take agreement for the LNG produced at the facility has been established with Vitol Group.
In the meantime, experts have hailed the project saying it represents a major step forward in Nigeria’s energy sector, harnessing its vast 209 trillion cubic feet of natural gas reserves for export and domestic consumption. President Tinubu’s administration has been instrumental in supporting this project, pledging to remove impediments to its timely completion. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issued the LTC, aligning with the government’s gas expansion ambitions under the Petroleum Industry Act (PIA) 2021.
Speaking during the license signing and presentation, the Minister of State, Petroleum Resources (Gas), Hon. Ekperipe Ekpo, said that the project was in line with President Tinubu’s mandate to develop the nation’s gas sector for economic growth. “This is in line with the mission of President Bola Tinubu, to grow gas production, distribution, and utilisation. In line with the Decade of Gas Initiative, we are looking at gas driving the economy of this nation come 2030. We are going to achieve that.
“I salute NMDPRA for due diligence, and I salute the CEO of UTM LNG, for the bold step he and his team have taken to bring to work what we are going to celebrate today. I believe that after this presentation and celebration, all other things that need to be done to make sure the dream of today is realized tomorrow will be done,” he said.
In his remarks, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said “The project aligns with the main aspirations of the PIA 2021 which include the expansion of Midstream Gas Facilities in Nigeria. It also aligns with the targets of the Decade of Gas Programme and other Gas expansion projects of the current Administration.
He pledged the Authority’s commitment to provide guidance and oversight for the project’s successful implementation while ensuring it complied with all regulatory requirements throughout its lifecycle.
Industry stakeholders, including Minister of State for Petroleum Resources (Gas) Hon. Ekperikpe Ekpo and NMDPRA Chief Executive Officer Farouk Ahmed, celebrated the milestone. UTM FLNG Limited’s Group Managing Director, Dr. Julius Rone, expressed gratitude to President Tinubu and acknowledged the collaborative efforts of NMDPRA and other stakeholders. The project’s journey began in 2019 with concept studies, followed by the successful completion of the FEED phase in October 2023. UTM FLNG Limited is committed to operating with integrity, sustainability, and respect for communities and the environment. With completion expected in 2028 and gas production projected for 2029, this FLNG facility promises to generate massive employment, business opportunities, and lower-cost gas for Nigerians.
UTM Offshore Limited was incorporated in July 2012 as a privately held Nigerian company. A part of an indigenous conglomerate actively engaged in diverse sectors of the Nigerian and International markets which includes but without limitation to the Direct Sales and Direct Purchase (DSDP) of the Nigerian Crude Oil – crude-for-products-exchange (swap); an established provider of Premium Marine Logistic and Support services in Subsea Engineering / Construction, Dredging, Equipment Rental / Leasing, Procurement / Supply, and General Labour which includes the provision of service boats and allied equipment like Platform Supply Vessels, Security Vessels, Anchor Handling Tug, Crew/Supply Boats, Dive Support Vessels, Drill-Ship, Jack-Up Barges, Floating Production, Storage and Offloading unit, to support the offshore and on-shore drilling campaigns of oil majors operating in Nigeria. and currently, pioneering the first ever Floating Liquefied Natural Gas (FLNG) with a capacity of producing 176mmscf/d of natural gas from the Oil Mining Lease 104 offshore in Akwa Ibom, Nigeria.
UTM Offshore Limited also specializes in DSDP (Direct Sales Distribution Program) services tailored for the oil and gas sector. With expertise in creating efficient and direct channels for the distribution of oil and gas products, connecting producers directly with end consumers and businesses.