The Federal Government has applauded the UTM Offshore Limited and its technical partners on agreements for the commencement of the front end engineering design (FEED) for Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility.
This followed the signing of agreements on Wednesday by three technical partners — Kellogg Brown and Root (KBR) UK, Japan Gas Corporation (JGC), and TechnipEnergies Limited, in London, UK.
A statement yesterday by the Senior Adviser, Media and Communications, Horatius Egua, quoted the Minister of State for Petroleum Resources, Timipre Sylva, as assuring of the government’s continued support, while creating an enabling environment for business investments in the country, especially in gas development.
The statement explained that the FEED contract entails conducting for UTM Offshore various studies to figure out technical issues and estimate investment cost for the FLNG facility prior to the Engineering, Procurement and Construction (EPC) phase, which will take 10 months.
It said further: “The FEED contract signing is a follow up to the successful execution of the pre-FEED agreement between UTM Offshore Ltd with JGC, a leading International Engineering Design, Procurement and Construction firm.
“The pre-FEED scope was completed within four months from commencement date. KBR provided due diligence on the JGC scope by conducting a third-party review of all deliverables from JGC during the Pre-FEED.”
Speaking during the contract signing, Sylva said: “The PIA is already improving the petroleum industry’s reputation, paving the way for new investments, creating jobs, supporting the economic diversification agenda and strengthening Nigeria’s ability to fulfil the world’s expanding energy demand.
“As a developing nation, we believe that affordable, accessible and reliable energy will continue to be essential to sustaining and powering our growing economy, and to lift millions out of poverty,” he said, adding that only gas can help to bridge the current energy gaps in the country.
UTM FLNG will target the processing of associated gas currently flared to cut carbon emissions and monetise additional reserves for domestic and global markets, and aligns with Nigeria Gas Flare Commercialisation Programme (NGFCP) and the decade of gas agenda.
FLNG as game changer
While reiterating the government’s determination to leverage natural gas as Nigeria’s transition fuel with FLNG technology as the game changer, Sylva insisted that “gas remains the solution to ensuring our energy security, economic competitiveness, and a reduction of greenhouse gas emissions.”
“We have already proclaimed that gas is our transition fuel and a destination fuel, and we anticipate that it will be a major component of our energy mix by the year 2060,” he added.
He said the UTM FLNG will target the processing of associated gas currently flared to cut carbon emissions and monetise additional reserves for domestic and global markets, which aligned with Nigeria Gas Flare Commercialisation Programme (NGFCP) and the decade of gas agenda.
He also said there are generous incentives to enable development, distribution, penetration and utilisation of gas.
He disclosed that the UTM Offshore project will involve the development and financing of a 1.52 million tonnes per annum (MTPA) FLNG facility with a capacity to process 176 million standard cubic feet (scf) of natural gas daily and condensate,” he said.
Also speaking, the Managing Director and Chief Executive Officer, UTM Offshore, Julius Rone, said like most other nations of the world, Nigeria is keen on, and working assiduously towards achieving energy transition, which should start from gas development.
Noting that Nigeria’s potential of about 600 trillion cubic feet of gas, has the enormous potential to diversify its economy, he equally agreed that “…the rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country.”
Similarly, the President, African Export Import Bank (AfreximBank), Prof. Benedict Oramah, was said to have lauded the transparent pursuit of the FLNG project by UTM Offshore, and pledged the full support of the bank for the project.
Recall that in December 2021, UTM Offshore and AfreximBank signed a $5billion MoU for the financing of the FLNG.
Oramah noted that as the traditional (multinational) investors in oil-gas initiatives decided to stop funding oil and gas operations in Africa due to climate change, Africans must find ways to convert their gas resources to wealth.
“We are not going to keep waiting for multinationals to help us harness our wealth. AfreximBank is supporting the FLNG project in Nigeria because we have seen that Mr. Julius Rone is serious,” he said.
The FLNG facility is being developed in collaboration with LNG Investment Management Services (LIMS), a subsidiary of Nigeria National Petroleum Company Limited (NNPC Ltd).
The facility, a newly built vessel, will receive gas feedstock from an existing offshore facility, treat it to required LNG standard, liquefy the gas, store the LNG and offload to LNG carriers.
