Delta, NNPCL take 8%, 20% equity in $2.15bn UTM Offshore Nigeria’s first FLNG facility

… to dedicate over 300,000 metric tonnes of LPG (cooking gas) to domestic market

Oredola Adeola

The Nigerian National Petroleum Company Limited (NNPC Ltd.), UTM Offshore, and the Delta State Government have signed a $2.15bn Shareholders Agreement (SHA) with the equity holding of 20%, 72%, and 8% stakes respectively in advancement of the development of the first Floating Liquefied Natural Gas (FLNG) facility in Nigeria, aiming to produce 1.81 to 2.72 billion metric tonnes per annum (bmtpa) of gas.

This was disclosed in a statement released on Tuesday by Olufemi Soneye, NNPC Ltd., Chief Corporate Communications Officer (CCCO) after a signing ceremony of a SHA between the NNPC Ltd., UTM Offshore and the Delta State Government on the development of the FLNG facility in Nigeria, held at the NNPC Towers in Abuja.

According to the statement, project equity has NNPC Ltd., UTM Offshore, and the Delta State Government holding 20%, 72%, and 8% stakes respectively.

Mele Kyari, Group Chief Executive Office (GCEO) in his remark during the signing ceremony stated that in the next 2-3 years, gas will be used to bring about a revolution in our country.

He said, “The outcomes will be clear on the table; there will be prosperity, and value will be created. Not just creating gas for export but progressing on all our initiatives of bringing gas into the domestic market.

“Our backbone infrastructures are almost ready to ensure we achieve that. Once that happens, we will see the immediate impact on the power sector, gas-based industries, and several other collateral values that this will create,” the GCEO stated.

“Describing the FLNG project as a task that must be done, the NNPCL said Nigeria is a gas country whose abundant gas resources have been under-utilised.

He further stressed that the new focus is to monetise such gas resources for the benefit of the country and the world. He added that the FLNG Project fits into the Federal Government’s gas aspirations under the Decade of Gas Initiative and is in line with President Bola Tinubu’s clear agenda to create a gas hub so that value can be maximised, and Nigeria achieves the prosperity that it deserves.

According to him, the FLNG was the first of its kind that the company was taking a keen interest in and holding equity in.

He said, “More than this, there are several Floating LNGs that we are promoting, including fixed LNG projects. We are happy to collaborate with the Delta State Government. We will take practical steps to get it done. We are committed to delivering this project in time, on schedule, and at the best possible cost,” the GCEO added.

Mr. Julius Rone, Group Managing Director of UTM Offshore Limited, earlier in his remarks, described the SHA execution as another significant milestone in actualizing Nigeria’s first indigenous FLNG.

Rone commended President Tinubu for his dedication towards developing the Nation’s gas resources, as exemplified in the recently held COP28 Conference in Dubai, UAE, where the President made a commitment to the complete flare-down and use of Nigeria’s gas resources as a transition fuel to achieve the global transition to cleaner energy fuels and reduce methane emission in oil and gas operations.

He also lauded the GCEO of NNPC Ltd for his leadership and commitment to ensuring that Nigeria’s gas resources are developed within the provisions of the Petroleum Industry Act (PIA) 2021.

Rt. Hon. Sheriff Oborevwori, Governor of Delta State, in his comment, stated that the Delta State Government, which has 40 percent of Nigeria’s proven gas reserves, decided to take 8% equity because of its conviction of the strategic importance of the project to the national economy.

Apart from producing over 300,000 metric tonnes of LPG (cooking gas) which will be dedicated to the domestic market, the Governor said the FLNG project will also help to mitigate the environmental hazards in the Niger Delta by reducing gas flaring; creating ample employment opportunities and ensuring the switch from kerosene and firewood to cleaner energy, thus improving the health and general wellbeing of the people.

Rt. Hon. Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas) who also witnessed the execution of the SHA said the FLNG will ensure the monetisation of Nigeria’s gas resources to drive the economy and attain energy security.

Mr. Olalekan Ogunleye, NNPCL Executive Vice President, Gas, Power & New Energy, in his brief comment on the project, lauded the Federal Government for its belief in the ability of gas to drive and accelerate economic growth which has been exemplified by the initiative to create a gas economy, especially through the Decade of Gas.