In an effort to foster the growth of the gas market and enhance the accessibility and affordability of cooking gas for consumers, the Nigerian National Petroleum Company (NNPC) Limited and UTM Offshore Limited have entered into a Heads of Terms Agreement. This agreement outlines the terms of the NNPCL’s 20 percent equity contribution in the UTM FLNG Project.
The signing ceremony, which occurred at the NNPCL corporate headquarters in Abuja, marks a collaborative endeavor between the two companies to provide clean energy to Nigerians for various applications.
Mr. Julius Rone, the group managing director of UTM Offshore Limited and the project’s promoter, highlighted that this signing reflects UTMOL’s commitment to lowering and stabilizing cooking gas prices, thus expanding accessibility to a wider consumer base. The advantages extend to creating a healthier environment, generating investment opportunities, and yielding thousands of direct and indirect employment prospects for Nigerians.
The Final Investment Decision (FID) is anticipated to be made in the fourth quarter of 2023, with the project slated to commence in the fourth quarter of 2026. Once completed, the project will yield 1.7 million metric tons per annum (mmtpa) of LNG and 300,000 metric tons of LPG (cooking gas), exclusively for the domestic market. The initiative is projected to provide direct employment for 3,000 Nigerians and an additional 4,000 people in indirect roles. The produced LPG will contribute to reducing cooking gas prices, enhancing the socioeconomic welfare of Nigerians, curtailing deforestation, minimizing gas flaring, and decreasing carbon emissions.
The facility, situated approximately 60 kilometers offshore at a water depth of 64 meters, will be constructed by esteemed engineering firms: JGC of Japan and Technip of France, with the support of KBR as the Owners Engineer.
Mr. Julius Rone expressed, “Today is a momentous day for Nigeria. We at UTM are thrilled that NNPCL has deemed this project worthy of investment and partnership to deliver Nigeria’s inaugural floating LNG.”
He added, “This is a significant achievement for an indigenous company to collaborate with one of the world’s premier energy conglomerates – NNPCL. We take great pride in working with NNPCL to achieve this pioneering floating LNG. With NNPCL’s involvement, we are confident that we will accomplish the first floating energy milestone by December 2026, as pledged to Mr. President.”
Mr. Julius Rone also emphasized their project timeline, intending to finalize the Front-End Engineering Design (FEED) by the end of October 2023, followed by commencing work on the Open Book Estimate (OBE) for the Engineering, Procurement, and Construction (EPC) contract in November 2023.
He highlighted the significance of UTM being the first indigenous company to undertake such a project and expressed optimism for a successful collaboration with their partners who have been engaged in this initiative since 2019.
In acknowledgment of NNPCL’s support, he conveyed gratitude to the group chief executive officer of NNPCL, Mr. Mele Kyari, and his management team for their unwavering dedication, patriotism, and belief in UTM. Mr. Julius Rone concluded by affirming that the project’s benefits would soon be realized by Nigerians.
Mr. Mele Kyari, the CEO of NNPCL, underscored NNPCL’s commitment to the project, deeming it of utmost national importance and vowing unwavering support for its success.
He asserted, “No matter the volume of reserves beneath the ground, if they remain untapped, they hold no value. This underscores our keen interest in this project, and we are committed to contributing our part to ensure its success. Rest assured, NNPCL stands firmly behind this endeavor.”