The African Export-Import Bank (Afreximbank) and UTM Offshore have signed a Memorandum of Understanding (MoU) to raise $2 billion for the development of Nigeria’s first Floating Liquefied Natural Gas (FLNG) project.
The UTM Offshore FLNG will be the first such project developed by an African company on the continent. This was made known by the Principal Consultant for the development of the facility, Dr Yahuza Kassim, who stated in Lagos on Wednesday that the MoU was signed on Tuesday in Abuja.
Kassim said the MoU was signed by Mr Julius Rone, Group Managing Director, UTM Offshore and Dr Benedict Oramah, President and Chairman of Afreximbank, adding that this paved the way for additional collaboration between the 2 institutions to support a future Final Investment Decision on UTM’s FLNG project. Afreximbank further committed to funding the second phase of the project to the tune of $3 billion.
According to NAN, Kassim said UTM Offshore has been studying and conceptualising the development of an FLNG in Nigeria since 2020.
He said, “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 block is operated by the joint-venture of ExxonMobil (operator, with 40 per cent equity) and the NNPC, with 60 per cent equity in the offshore Yoho Field.
“Preparations for the project are now in full swing with the benefit of a 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.’’
UTM Offshore appointed U.S-based KBR as Owners Engineer also in May, while Rotterdam-based global energy and commodities trader, Vitol, has also joined the consortium as off-taker for the LNG.
The Group Managing Director of UTM Offshore, Rone, was quoted as saying. ‘’It will significantly contribute to the Nigerian government’s agenda of reducing gas flares.
“As Africa’s FLNG industry grows, UTM Offshore is 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 project notably involves the development and financing of a 1.2m tonnes per annum FLNG facility with a capacity to process 176 MMscfd of natural gas and condensate.
“The unit would target the processing of associated gas currently flared to cut carbon emissions and monetise additional reserves for domestic and global markets.’’
Recall that in a related development, Afreximbank, last month, signed a US$1.04 billion deal with the Nigerian National Petroleum Corporation (NNPC) Ltd to finance the exploration of crude oil.
Afreximbank in the statement noted that the transaction comprises a Pre-Export/Shipment Finance Facility underpinned by a Forward Sale Agreement (FSA) and Offtake Contracts from the NNPC acting as the Borrower and Seller.
