The Nigerian National Petroleum Company (NNPC) Limited has signed an agreement with UTM Offshore Limited (UTMOL) as part of efforts to grow the gas market as well as make cooking gas accessible and affordable to consumers.
The Heads of Terms Agreement which was signed on Wednesday spelt out terms of a 20% equity contribution of the NNPC in the UTM FLNG Project.
According to a statement which was issued on Thursday, the agreement signing ceremony which took place at the NNPC corporate headquarters in Abuja, is a collaborative effort between the 2 companies to provide clean energy to Nigerians for various uses.
Partnership to reduce and stabilize the price of cooking gas
The Group Managing Director of UTM Offshore Limited, Mr Julius Rone, said the partnership was indicative of UTMOL’s commitment to helping bring down and stabilize the price of cooking gas.
He listed the benefits of the agreement to include a healthier environment, investment opportunities and thousands of direct and indirect employment opportunities for Nigerians.
- He said, “Final Investment Decision is expected to be taken in the fourth quarter of 2023 with planned Project start-up in the fourth quarter of 2026. When completed, it will produce 1.7mmtpa of LNG and 300,000 metric tons of LPG (cooking gas) which will be fully dedicated to the domestic market.
- “The project is estimated to provide direct employment for 3,000 Nigerians and indirect employment for an additional 4,000 people.
- “The LPG produced will help bring down the price of cooking gas, improve the socioeconomic well-being of Nigerians, and reduce deforestation, gas flaring and its attendant carbon emission.’’
Rone added, “We are very proud to work with NNPCL to deliver this first floating LNG. We believe that with NNPCL on board this project, by the special grace of God, we will deliver the first floating energy by December 2026 just as we promised Mr President.
“We understand how important this is to Nigerians and Nigeria’s economy, and we are committed to enlisting and partnering with only the best to actualize this project. We are leaving no stone unturned in terms of the quality of companies that will deliver this project.”
NNPC solidly behind the project
Speaking at the occasion, the Group Chief Executive Officer of NNPC, Mele Kyari, said the project was of utmost importance to the nation and must be supported to succeed at all costs.
- He said, “No matter the number of reserves you have underground if you haven’t brought it up to the surface, you have done nothing. This is why we are very interested in this project and we are going to do our own part to ensure its success. Be assured that NNPCL is solidly behind this project.’’
He expressed confidence in the ability and capacity of the company as led by Rone to bring the project to an effective realization, adding that the investment of NNPCL in it is indicative of that fact.
In his remarks, NNPC’s executive vice president, Gas, Power and New Energy, Mr Mohammed Ahmed, said, “We cannot commercialise this if it is not pulled out, and we cannot also pull it out if we don’t invest in it. To be able to commercialise these gas assets, we need to harness resources together.
- “Where we can do it alone, we do, but where we cannot, we partner with others.
- “And even if we don’t initiate, we partner with those who initiate, support them, and also put our money into that investment. That is the beauty of collaboration.
- “… I can confirm that NNPCL is very much interested in this project.
- “We have demonstrated that by signing up to 20 per cent and we will do whatever it takes to ensure that this project is executed.”
