The federal government has approved the request of UTM Offshore Limited to build a 2.8 million tonnes floating LNG plant in Akwa-Ibom state.
It would be the first floating LNG project in Nigeria projected to cost over $2 billion and would be the first of its kind in Nigeria.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority granted a licence to construct to the company for a liquefied natural gas (LNG) project, with an estimated production capacity of 2.8 million metric tons annually. This was disclosed on the NMDPRA’s official X handle.
The statement reads, “The NMDPRA issued a Licence to Construct (LTC) to UTM Offshore Ltd for the first Floating Liquefied Natural Gas (FLNG) in Nigeria.”
“The project, which is located in Akwa Ibom State, is aimed at processing 324 MMSCF/D of natural gas and producing LPG, condensate, and 2.8 million tonnes of LNG per year.”
The NMDPRA boss stated that UTM was originally granted a license in 2019 to build a facility with a capacity of 1.2 million tons per annum. However, this capacity was later increased to 2.8 million tons due to rising demand for LNG in the market.
Nigeria is seeking to reduce its dependence on oil by encouraging investments in its largely untapped gas reserves, estimated at 200 trillion cubic feet. Currently, a significant portion of the country’s gas output is either flared or re-injected into wells.
About the project
It was revealed that the plant, located offshore in Akwa Ibom state in the oil-rich Niger Delta, is projected to be commissioned in 2028, with the production of first gas expected a year later.
- The facility will produce Liquefied Natural Gas (LNG), petroleum gas, and condensate.
- UTM’s Chief Executive Officer, Julius Rone, shared that the company had signed a memorandum of understanding with the African Export-Import Bank in 2021 to raise up to $2 billion for the project.
- The bank has since received preliminary approval to invest $350 million in the venture, and Rone added that a final investment decision is anticipated by the last quarter of the year.
- Additionally, Rone confirmed that UTM had secured contracts with Japan’s JGC Corp. and Houston-based KBR Inc. to design the facility. Vitol Group has entered into an off-take agreement for the LNG that will be produced at the plant.
Last year, the company also signed a deal with the Nigerian National Petroleum Co. Ltd., which acquired a 20% stake in the project.
