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Afreximbank, firm sign $2bn deal for Nigeria’s floating LNG

UTM Offshore, a Nigerian marine and services group, and the African Export-Import Bank have signed a Memorandum of Understanding to raise $2bn for the development of Nigeria’s first floating liquefied natural gas project.

A statement issued in Abuja by the marine services group stated that the MoU was signed in Abuja by Julius Rone, Group Managing Director/CEO of UTM Offshore and Dr. Benedict Okey Oramah, President and Chairman of Afreximbank.

“The agreement paves the way for additional collaboration between UTM Offshore and the Afreximbank to support a future final investment decision on UTM’s FLNG project,” the statement read in part.

It added, “The company has been studying and conceptualising the development of an FLNG in Nigeria since 2020.

“In February 2021, it received a License to Establish from Nigeria’s former Department of Petroleum Resources for the installation of an FLNG unit on oil mining lease 104.”

The group explained that the oil block was operated by the joint venture of Mobil Producing Nigeria (operator, 40 per cent) and the state-owned Nigerian National Petroleum Company Limited (NNPC, 60 per cent), adding that it contained the producing Yoho field.

“Preparations for the project are now in full swing and benefit from robust global and technical expertise. The pre-Front End Engineering Design contract was awarded to JGC Corporation of Japan in May and completed in October,” the group stated.

It further said, “KBR was appointed Owners Engineer while global energy and commodities trader, Vitol, has also joined the consortium as off-taker for the LNG.”

The statement quoted Rone as saying, “The UTM Offshore FLNG will be the first such project developed by an African company on the continent.

“It will also significantly contribute to the Nigerian government’s agenda of reducing the flaring of associated gas across our industry.

“As Africa’s FLNG industry grows, we are well positioned to offer attractive project economics by developing shallow water gas reserves, while bringing significant environmental benefits to our industry as a whole.”

The group stated that the project involved the development and financing of a 1.2 million tonnes per annum FLNG facility with a capacity to process 176 MMscfd of natural gas and condensate.

It said the unit would target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets.

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