UTM Offshore and Afreximbank Sign $5Bn Deal for Nigeria’s Floating LNG

The agreement, split into two parts, would see the continental bank raise $2 billion for the first phase and commit to another $3 billion for the second phase.

According to a statement released by the maritime services group, the MoU was signed in Abuja by the Managing Director of UTM Offshore Limited, Mr. Julius Rone, and President of Afreximbank, Dr. Benedict Okey Oramah, on Wednesday. The MoU sets the path for more collaboration between the two organizations in the future to support a Final Investment Decision (FID) on the project, which UTM has been analyzing and conceptualizing since 2020.

The UTM Offshore FLNG project will be the first on the continent to be built by an African firm. This was confirmed by Dr. Yahuza Kassim, the facility's Principal Consultant, who claimed in Lagos on Wednesday that the MoU was signed on Tuesday in Abuja.

In February 2021, Nigeria's former Department of Petroleum Resources (DPR) issued UTM Offshore Limited a License to Establish (LTE) for the installation of an FLNG unit on oil mining lease (OML) 104. The block is operated by the joint venture of ExxonMobil, with forty percent equity, and the NNPC, with sixty percent equity, in the Yoho field.

Thanks to a solid global and technical team, the project's preparations are currently in full gear. In May, JGC Corporation of Japan was given the pre-Front End Engineering Design (Pre-FEED) contract, which was finalized in October.

Also, in May, UTM Offshore selected KBR of the United States as Owners Engineer, and Vitol, a Rotterdam-based global energy and commodities trader, joined the consortium as an LNG off-taker.

Rone said the project would enormously contribute to the Nigerian government's goal of minimizing associated gas flaring in our sector.

According to him, as Africa's FLNG sector expands, they will be in a better position to offer lucrative project economics by developing shallow water gas reserves while also providing substantial environmental advantages to the industry as a whole.

The project entails constructing and financing a 1.2 million tonnes per annum FLNG plant capable of processing 176 million standard cubic feet per day of natural gas and condensate.

The plant would currently focus on processing flared-related gas to reduce carbon emissions and monetize additional reserves for domestic and international markets.