IOCs sign $5bn contract to boost gas supply
Three international oil and gas companies have signed a Memorandum of Understanding for the construction of a $5bn Floating Liquefied Natural Gas facility in Nigeria – the first ever in the country.
With a capacity of 1.52 million tonnes per annum, the FLNG facility is expected to process 176 million standard cubic feet of natural gas per day, as well as condensate.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, disclosed this on Wednesday at the signing ceremony of the Front End Engineering Design contract between UTM Floating LNG Limited, JGC Corporation, Technip Energies & Kellog Brown & Root Engineering Companies, for the development of the first Floating Liquefied Natural Gas facility in Nigeria.
He said the Petroleum Industry Act 2021 was currently improving the sector’s reputation in Nigeria, paving the way for new investments, creating jobs, supporting the economic diversification agenda and strengthening Nigeria’s ability to fulfil the world’s expanding energy demand.
“There are generous incentives to enable development, distribution, penetration, and utilisation of gas. And this is why the UTM Offshore project will involve the development and financing of a 1.52 million tonnes per annum FLNG facility with a capacity to process 176 million standard cubic feet of natural gas per day and condensate,” Sylva stated.
He added, “I am aware that the UTM FLNG unit will also target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets, which aligns with the Federal Government’s gas flare commercialisation program and the decade of gas agenda.”
He applauded the African Export-Import Bank for facilitating the signing of the MoU to raise the funds required for the project, adding that pact would lead to more deals in Nigeria’s gas sector.
Sylva said, “Let me use this opportunity to thank Afreximbank, under the leadership of its amiable President and Chairman, Dr. Benedict Okey Oramah, for orchestrating the signing of the MoU with UTM Offshore Limited to raise $5bn for the development of Nigeria’s first Floating Liquefied Natural Gas project.
“While I believe the MoU will pave the way for additional collaboration between both entities to support a final investment decision on the project, I look forward to more MoUs between Afreximbank and other entities to launch other firsts like the first Floating Methanol Production plant, first Floating Blue Ammonia Production plant, and other technologies with a view to creating a zero-carbon emission fuel in Nigeria.”
The minister pointed out that the number of offshore gas finds had surged in recent years around the world, with LNG and floating LNG becoming even more important in terms of satisfying the world’s future energy needs.
“According to market research analysts, the FLNG market is estimated to increase at a compound annual growth rate of 27.14 per cent, reaching $88.99bn by 2024,” he stated.
Sylva added, “The UTM offshore FLNG project is therefore timely and will lead towards a faster-moving, more diverse and more flexible global LNG industry.
“Let me use this opportunity to once again congratulate UTM offshore Limited for taking the bold step in venturing into the FLNG space.”