By William Emmanuel Ukpoju
In a significant boost to Africa’s gas industry, leading Floating Liquefied Natural Gas (FLNG) operators and project developers converged at the African Energy Week: Invest in African Energies 2024 conference to share insights on the continent’s mega-scale LNG and FLNG projects. The panel discussion highlighted the critical role of financing, regulatory frameworks, and technical expertise in driving the growth of Africa’s gas sector.
UTM Offshore’s $5-billion UTM FLNG facility, Nigeria’s pioneering FLNG project, took centre stage. Julius Rone, CEO of UTM Offshore, revealed that the project has completed the Front End Engineering Design (FEED) phase and is progressing to the Engineering, Procurement and Construction (EPC) stage, with a Final Investment Decision (FID) expected in 2025. “Financing remains a key challenge in developing African projects. We need to focus on aggregating funding to unlock the continent’s vast gas resources,” Rone emphasized.
In an exclusive interview with The Valuechain Energy Magazine during the AEW, Rone shared his thoughts on UTM Offshore’s participation in the conference. “This is our third edition, where we are participating as a diamond sponsor; for us, the AEW promotes African values and companies’ potential in the energy space. As the foremost African floating company developing LNG, it only makes sense for us to be here.”
Rone highlighted the significance of the conference, citing the signing of a term sheet with Afreximbank for $350 million and meetings with other financial institutions, including Rand Merchant Bank, Standard Bank of South Africa, and Standard Chartered Bank. “This edition of the AEW is quite robust and interesting; we are participating in the next session on Africa LNG floating LNG technology and concept, and the progress so far in Africa.”
Regarding the benefits of the UTM FLNG project for Nigerians, Rone noted, “This will be the first floating LNG in Nigeria, and it’s a result of the current administration’s support for gas development. President Tinubu has encouraged investors to develop gas in Nigeria, offering incentives for both offshore and onshore projects.”
The project is expected to provide over 500,000 tons of LPG for the domestic market, reducing cooking gas prices and saving forex. Additionally, it will create employment opportunities for over 7,000 people, generate taxes and royalties, and promote cleaner energy. “UTM is keying into the government’s initiative on gas development; our focus is on gas, and we want to stay focused to achieve not only this first project but also future projects.”
Rone emphasized the importance of indigenous companies leading the charge in Africa’s energy sector. “We want to show that an indigenous company can do such kinds of projects, opening doors for other Nigerian and African companies to venture into the floating energy space.”
Eni’s successful Coral Sul FLNG project in Mozambique has positioned the country as a major player in the global gas market. Ivan Codognotto, Technical Director at Eni Rovuma Basin, highlighted the advantages of FLNG technology in monetizing gas resources, particularly in remote offshore locations. “Coral Sul has unlocked Mozambique’s offshore gas reserves, estimated at 100 trillion cubic feet. We’ve achieved remarkable success, exporting over five million tons of LNG in 2024.”
Golar LNG, a pioneer in Africa’s FLNG sector, shared its experience with the Hilli Episeyo FLNG vessel offshore Cameroon. Federico Petersen, Chief Commercial Officer of Golar LNG, discussed the company’s latest project, the Fuji FLNG unit, which is expected to begin production by 2028.
The panel emphasized the importance of a supportive government framework, technical expertise, and access to financing in advancing Africa’s LNG and FLNG projects. “A good asset, a good contract, and a good overall framework are essential for project success,” Petersen stressed.
As Africa’s energy landscape continues to evolve, UTM Offshore’s pioneering FLNG project is poised to leave a lasting impact on Nigeria’s economy and environment, paving the way for a brighter energy future. With its commitment to Nigeria’s gas development and job creation, UTM Offshore is redefining the country’s energy narrative and inspiring a new wave of indigenous companies to follow in its footsteps. As the energy sector looks to the future, UTM’s groundbreaking FLNG project serves as a beacon of hope for Africa’s energy growth, demonstrating the potential for home-grown innovation and expertise to drive transformative change. The project is a testament to the power of collaboration and visionary leadership, promising a brighter future for Nigeria’s energy sector and its people.
As the curtains close on AEW 2024, UTM Offshore’s FLNG project stands as a shining example of Africa’s potential to shape its own energy destiny, inspiring confidence in the continent’s ability to drive growth and prosperity.