NNPC Signs Agreement for 20% Equity in UTM Floating Gas Project

The Nigerian National Petroleum Company (NNPC) Limited has signed a Heads of Agreement with Nigerian oil and gas company, UTM Offshore Limited, for the UTM Floating Liquefied Natural Gas (FLNG) project, which will see it contribute 20 per cent equity.

The planned FLNG vessel is set to produce 176 million cubic feet of gas per day from the Yoho Field and will help boost domestic gas utilization in Nigeria.

With the agreement, liquefied petroleum gas (LPG) will become increasingly accessible to the Nigerian market, thereby reducing the costs of the product while improving health, environmental protection and employment across the country.

Nigeria has over 200 trillion cubic feet of proven gas reserves, resources which hold immense opportunities for the country and wider region.

Speaking on this, NNPC Limited Group Managing Director Mr Mele Kyari said, “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 this week, the agreement serves as the next step towards finalizing the project.

Business Post understands that the FLNG facility is expected to be complete by 2026 and comprises 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, it was reported that UTM Offshore inked the Front-End Engineering and Design contract with Kellogg Brown and Root, Japan Gas Corporation, and Technip Energies.

According to Mr 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. When completed, 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.

“The project is estimated to provide direct employment for 3,000 Nigerians and indirect employment for an additional 4,000 people.

“The LPG produced will help bring down the price of cooking gas, improve the socioeconomic well-being of Nigerians, and reduce deforestation and carbon emissions.”

Mr Rone believes that the agreement is a testament to the company’s commitment to advancing access to clean cooking solutions in the country.

With the new agreement, the partners have formalized the domestic LPG components and have additionally secured the backing of one of the country’s biggest energy firms, the national oil company NNPC.

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