FG lauds UTM offshore, partners on deal for Nigeria’s first FLNG facility

The Federal Government has applauded the UTM Offshore Limited and its technical partners on agreements for the commencement of Front End Engineering Design (FEED) for Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility.

The agreements which involved three technical partners namely: Kellogg Brown and Root (KBR) UK, Japan Gas Corporation (JGC) and TechnipEnergies Limited were signed at a brief event at the Hilton Park Lane, London, UK.

This is contained in a statement by Horatius Egua, Senior Adviser, Media and Communications to the Minister of State for Petroleum Resources, Chief Timipre Sylva, on Thursday in Abuja.

The statement quoted Sylva, who spoke during the FEED contract signing, as commending the pioneering efforts of UTM Offshore Ltd management.

He said the federal government would continue to support and create enabling environment for business investments in the country, especially in gas development.

The FEED contract with the three firms essentially entails conducting for UTM Offshore Ltd, various studies to figure out technical issues and estimate investment cost for the FLNG facility prior to the Engineering, Procurement and Construction (EPC) phase.

The time line for this phase of the FLNG project is 10 months.

The FEED contract signing is a follow up to the successful execution of the pre-FEED agreement between UTM Offshore Ltd with JGC, a leading International Engineering Design, Procurement and Construction firm.

The pre-FEED scope was completed within four months from commencement date. KBR provided due diligence on the JGC scope by conducting a third-party review of all deliverables from JGC during the Pre-FEED.

UTM Offshore Ltd entered into the pre-FEED agreement with JGC and KBR in May 2021.

While reiterating government’s determination to leverage on natural gas as the nation’s transition fuel with Floating LNG Technology as the game changer, Sylva said the Petroleum Industry Act was improving the industry’s reputation, paving the way for investments, jobs, economic diversification and strengthening ability to fulfil world’s energy demand.

“We have already proclaimed that gas is our transition fuel and a destination fuel, and we anticipate that it will be a major component of our energy mix by the year 2060,” he said.

He said the UTM FLNG would target the processing of associated gas currently flared to cut carbon emissions and monetise additional reserves for domestic and global markets, which aligned with Nigeria Gas Flare Commercialisation Programme (NGFCP) and the decade of gas agenda.

“There are generous incentives to enable development, distribution, penetration and utilisation of gas.

“This is why the UTM Offshore project will involve the development and financing of a 1.52 Million Tonnes Per Annum (MTPA) FLNG facility with a capacity to process 176 million standard cubic feet of natural gas per day and condensate,” he said.

The Managing Director and Chief Executive Officer of UTM Offshore Ltd, Mr Julius Rone said like most other nations of the world, Nigeria was keen on, and working assiduously towards achieving energy transition.

“At UTM Offshore, we completely agree with President Muhammadu Buhari that given Nigeria’s potential of about 600 trillion cubic feet of gas, the commodity has the enormous potential to diversify our country’s economy.

“We also agree that the rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country,” he said.

Rone disclosed that UTM Offshore is impressed with JGC’s handling of the pre-FEED component of the FLNG project, hence the resolve to reengage the firm for the main FEED phase.

The statement also quoted the President of African Export Import Bank (AfreximBank), Prof. Benedict Oramah, as lauding the transparent pursuit of the FLNG project by UTM Offshore Ltd, and pledged the full backing of the bank for the FLNG project.

Oramah, however, said the intervention of the President in optimising the utilisation of Nigeria’s gas resources came at a time when the traditional (multinational) investors in oil-gas initiatives decided to stop funding oil and gas operations in Africa due to climate change.

“We are not going to keep waiting for multinationals to help us harness our wealth. AfreximBank is supporting the FLNG project in Nigeria because we have seen that UTM offshore Ltd. is serious.

“In December 2021; UTM Offshore Ltd and AfreximBank signed a five billion dollars Memorandum of Understanding (MoU) for the financing of the UTM FLNG.

“The UTM FLNG is one of the projects AfreximBank is very proud of; just like the Dangote refinery. We are proud to be associated with these two projects in Nigeria,” he said.

UTM Offshore Ltd is pioneering the development of the FLNG facility in collaboration with LNG Investment Management Services (LIMS), a subsidiary of Nigeria National Petroleum Corporation Limited (NNPC Ltd).

The facility, a newly built vessel, will receive gas feedstock from an existing offshore facility, treat it to required LNG standard, liquefy the gas, store the LNG and offload to LNG carriers.

When completed, the floating LNG shall have an LNG production capacity of 1.2 mmtpa, Turret and Mooring System, Gas pre-treatment modules, LNG production modules, living quarters, self-contained power generation and utilities as well as capacities for LNG storage and offloading. (NAN)