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HomeNewsNNPCL signs deal for FLNG with UTM Offshore, Advancing Domestic Gas Use...

NNPCL signs deal for FLNG with UTM Offshore, Advancing Domestic Gas Use in Nigeria

  • The NNPC signs a Heads of Agreement with UTM Offshore Limited for a 20% equity contribution of the NNPCL in the UTM FLNG project;
  • A milestone to significantly improve access to gas-based cooking in the country

The Nigerian National Petroleum Corporation (NNPC) has signed a Heads of Agreement with Nigerian oil and gas company UTM Offshore Limited for the UTM Floating Liquefied Natural Gas (FLNG) project – a planned FLNG vessel set to produce 176 million cubic feet of gas per day from the Yoho Field. The agreement lays out the terms of the NNPC’s 20% equity contribution of the FLNG project, and represents a milestone in advancing domestic gas utilization in Nigeria.

The agreement showcases the NNPC’s commitment to ensuring domestic gas resources reap tangible rewards for the local population. According to NNPC Group Managing Director Mele Kyari, “No matter the amount of reserves you have underground, if you haven’t brought it up to the surface, you have done nothing. This is why we are very interested in this project and we are going to do our own part to ensure its success. Be assured that NNPC is solidly behind this project.”

Signed at the NNPC headquartered in Abuja a couple of days ago, the agreement is expected to serve as the next step towards finalizing the important project, a facility which is expected to be complete by 2026. It comprised a turret mooring system, gas pre-treatment modules, Liquefied Natural Gas (LNG) production modules, living quarters, self-contained power generation and utilities alongside storage and offloading. Last year, UTM Offshore inked the Front-End Engineering and Design contract with Kellogg Brown and Root; Japan Gas Corporation; and Technip Energies.

According to African Energy Chamber, this is a monumental step towards scaling up access to clean cooking solutions in Africa, with the project and agreement serving as blueprint for other resource-rich countries across the continent. It noted that the liquefied petroleum gas (LPG) would become increasingly accessible to the Nigerian market with this agreement thereby reducing costs of the product while improving health, environmental protection and employment across the country.

According to Julius Rone, Group Managing Director of UTM Offshore, “Final Investment Decision is expected to be taken in the fourth quarter of 2023 with planned project start up in the fourth quarter of 2026. With the completion of the project which is estimated to provide direct employment for about 3, 000 Nigerians, and indirect jobs for additional 4, 000 people according to Julius, it will produce 1.7 million tons per annum of LNG and 300,000 metric tons of LPG which will be fully dedicated to the domestic market. Adding that the LPG produced will help bring down the price of cooking gas, improve the socioeconomic wellbeing of Nigerians, reduce deforestation and carbon emissions.”

The report quoted Rone as saying that the agreement was a testament to the company’s commitment to advancing access to clean cooking solutions in the country. Adding that with the new agreement, the partners have been able to formalize the domestic LPG components, and has also secured the backing of one of the country’s biggest energy firms, the national oil company NNPC.

“The agreement signed between the NNPC and UTM Offshore is a testament to the commitment of the Nigerian government to advancing access to clean cooking solutions in Africa. Nigeria has over 200 trillion cubic feet of proven gas reserves, resources which hold immense opportunities for the country and wider region. Rather than continue with historic trends which would see African oil and gas exported as unprocessed hydrocarbons, both the NNPC and UTM Offshore have prioritized domestic consumption. This project is a milestone development for the country”, NJ Ayuk of African Energy Chamber said.

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