IOCs MoU to construct $5bn LPG facility in Nigeria

Three international oil and gas companies (IOCs) have signed a memorandum of understanding (MoU) to construct a $5bn Floating Liquefied Natural Gas facility in Nigeria – the first ever in the country.

The facility, with a capacity of 1.52 million tonnes per annum, is expected to process 176 million standard cubic feet of natural gas and condensates daily.

Speaking at the signing ceremony involving Front End Engineering Design contract between UTM Floating LNG Limited, JGC Corporation, Technip Energies & Kellog Brown & Root Engineering, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the facility is the first Floating Liquefied Natural Gas facility in Nigeria.

He said the Petroleum Industry Act 2021 was currently improving the sector’s reputation in Nigeria, 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.

“There are generous incentives to enable development, distribution, penetration, and utilisation of gas. And this is why the UTM Offshore project will involve the development and financing of a 1.52 million tonnes per annum FLNG facility with a capacity to process 176 million standard cubic feet of natural gas per day and condensate.

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“I am aware that the UTM FLNG unit will also target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets, which aligns with the Federal Government’s gas flare commercialisation program and the decade of gas agenda.

“Let me use this opportunity to thank Afreximbank, under the leadership of its amiable President and Chairman, Dr. Benedict Okey Oramah, for orchestrating the signing of the MoU with UTM Offshore Limited to raise $5bn for the development of Nigeria’s first Floating Liquefied Natural Gas project,” he said.

However, he expressed hope that the MoU will bring additional collaboration between both entities to support a final investment decision on the project.

“I look forward to more MoUs between Afreximbank and other entities to launch other firsts like the first Floating Methanol Production plant, first Floating Blue Ammonia Production plant, and other technologies with a view to creating a zero-carbon emission fuel in Nigeria,” he added.