The African Energy Chamber (AEC) (https://EnergyChamber.org) congratulates UTM Offshore, the Nigerian National Petroleum Company (NNPC) and Delta State Government on the signing of a groundbreaking shareholders agreement in Abuja on Tuesday to develop Nigeria’s first Floating Liquefied Natural Gas (FLNG) project. In line with the AEC’s commitment to African resource sovereignty, this partnership marks a significant step towards eliminating energy poverty and advancing the continent’s gas monetization agenda.
Notably, the UTM FLNG project is the first of its kind to be developed by an indigenous private company in Nigeria, reflecting the strategic importance of the project and its impact on national energy security. UTM Offshore will take a 72% equity share in the project, with NNPC and Delta State holding the remaining 20% and 8%, respectively. The project will feature a capacity of 1.8 billion metric tons per year for domestic use and export and its Final Investment Decision – valued at $2.1 billion – is expected to be taken before Q1 2024, with construction to begin next year.
Speaking to the economic benefits of the project, Delta State Governor, Sheriff Oborevwori, stated: “Of particular interest to Delta State Government is the dividend that this UTM FLNG will generate, thus advancing the socioeconomic development of our great state… The project will also help to mitigate the environmental hazards in Niger Delta by reducing gas flaring… Another benefit we envisage with this project is that it will create job opportunities for our youths.”
The Chamber agrees that the UTM FLNG project – and other African gas monetization initiatives like it – provide pathways to cleaner energy alternatives, reduced flaring and local job creation. Gas monetization is at the heart of the AEC’s commitment to a Just Transition, which enables African nations to lead their own resource development and utilize natural gas as a transitional energy source to stimulate downstream industry and finance green projects. Holding the largest proven gas reserves in Africa – 202 trillion cubic feet, to be precise – Nigeria requires substantial investments across its natural gas value chain, from upstream facilities to processing, power plants and associated infrastructure.
Under its National Gas Expansion Program launched in 2020, Nigeria is seeking to expand its domestic gas network, boost gas-based industrialization and eliminate gas flaring. The country has long been a hotspot for flaring due to a lack of financial incentives for oil producers to utilize associated gas. As a result, the Federal Government has mounted a concerted effort to reduce the practice of flaring, curb carbon emissions, and importantly, generate diversified gas-based industries and new revenue sources.
“African states like Nigeria are taking control of their energy future to monetize their untapped resources and unlock new energy production and diversified revenue streams. The UTM FLNG project is a testament to Nigeria’s commitment to leading innovation and driving sustainable development within its energy industry. The AEC applauds the visionary leadership demonstrated by all parties in bringing this agreement to a close and anticipates that it will serve as a catalyst for further collaboration and gas-focused developments in Nigeria and the wider West African region,” states NJ Ayuk, Executive Chairman of the AEC.
Distributed by APO Group on behalf of African Energy Chamber.