UTM Offshore signs FEED agreement for Nigeria’s first floating liquefied natural gas (FLNG) facility
22 November 2022
UTM Offshore signed an agreement for the Front-End Engineering Design (FEED) for Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility with engineering firms KBR, JGC Corporation and Technip Energies. The FLNG facility will have a Liquified Natural Gas (LNG) nameplate production capacity of 1.2 million metric ton per annum and a storage capacity of 200,000 cubic meters, as well as ancillary facilities to be located 60km from the shore of Akwa Ibom State, Nigeria.
UTM Offshore was incorporated in July 2012 as a privately held Nigerian company.
Having signed a head of terms agreement for the financing of the development with the African Export-Import Bank (Afreximbank) in July 2022, 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 monetization of stranded gas resources.
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’s signing of the deal will be a game changer within Africa’s gas market. The penetration of FNLG in Africa, which started in Cameroon and expanded to Angola and Mozambique and now to Senegal, Mauritania and Nigeria, highlights Africa’s commitment to unlocking the full exploitation of its gas resources. We believe UTM Offshore’s FLNG project development will not only open doors for energy security and GDP growth but will bring in world class technical know-how among the local people while creating long-term employment opportunities in line with Nigeria’s local content laws.—NJ Ayuk, the Executive Chairman of the AEC
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 positioned to expand its supply to Europe. UTM’s FLNG facility will be an enabler of industry expansion 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.