The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has granted a construction license for Nigeria’s first floating liquefied natural gas (LNG) facility. The project, led by UTM Offshore Ltd., is set to produce 2.8 million metric tons of LNG annually and is a key component of Nigeria’s gas expansion strategy.
- Project Scope: Initially approved in 2019 for a 1.2 million tons per annum facility, the project was expanded to 2.8 million tons per annum to meet rising LNG demand.
- Location: The facility will be situated offshore in Akwa Ibom State, within the Niger Delta, and is expected to be inaugurated in 2028 with first-gas production anticipated a year later.
- Funding and Partnerships: UTM has secured up to $2 billion for the project through a memorandum of understanding with the African Export-Import Bank, which has preliminarily approved a $350 million investment. The project design will be handled by Japan’s JGC Corp. and Houston-based KBR Inc., with Vitol Group managing an off-take agreement for the LNG.
- Stakeholders: The Nigerian National Petroleum Co. Ltd. holds a 20% stake in the project. UTM had initially planned to source feedstock from an offshore oil field managed by Exxon Mobil Corp. and NNPC, but this asset is currently being sold to Seplat, which is expected to utilize the gas reserves.
Farouk Ahmed, Chief Executive of NMDPRA, highlighted that the project aligns with the government’s objectives to tap into Nigeria’s significant gas reserves, currently mostly flared or re-injected. Julius Rone, CEO of UTM, emphasized the importance of the floating LNG technology in monetizing stranded gas and its role in enhancing Seplat’s balance sheet.
The development of this floating LNG facility marks a significant step in Nigeria’s energy sector, aiming to utilize its vast gas reserves and boost the country’s LNG production capabilities.
