UTM Offshore making strides towards Nigeria’s first indigenous floating LNG project
UTM Offshore making strides towards Nigeria's first indigenous floating LNG project - Offshore Energy
UTM Offshore making strides towards Nigeria’s first indigenous floating LNG project
UTM Offshore and Nigerian National Petroleum Corporation (NNPC) have signed a shareholders agreement with Delta State Government for the development of the nation’s first indigenous floating LNG project.
Under the agreement, which was hailed as a significant milestone in the development of the project, Delta State Government will own an 8% share of the project. NNPC will own 20% and the remaining 72% share is reserved for UTM Offshore.
Speaking at the signing ceremony, Governor Sheriff Oborevwori of Delta State explained that the state government took 8% equity in the floating LNG project because of its conviction of the strategic importance of the project to the national economy, adding that with 40% of Nigeria’s proven gas reserves in Delta State, it was a worthy investment.
He also expressed hope that construction of the project will begin next year.
Group Managing Director of UTM, Julius Rone, said the signing ceremony marks another significant milestone in actualizing Nigeria’s first indigenous FLNG.
According to Rone, the final investment decision (FID) on the project is expected to be taken before the end of the first quarter of 2024.
The agreement with Delta State follows the deal signed by NNPC and UTM Offshore earlier this year for the construction of Nigeria’s first indigenous floating LNG project.
Supported by $5 billion from the African Export-Import Bank (Afreximbank), the 1.5 million tonnes per annum (mtpa) project is seen as a “must-do” initiative for Nigeria.
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.