Nigeria’s First FLNG Project Gears Up for Final Investment Decision in Q4 2024
UTM FLNG Limited is setting ambitious goals for Nigeria’s pioneering floating liquefied natural gas (FLNG) project, eyeing a Final Investment Decision (FID) by the last quarter of 2024. This significant milestone was discussed during the company’s first-ever Board of Directors meeting on Tuesday, July 23, 2024, in Abuja, where the project’s Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC) phase received a nod of approval.
With an emphasis on expediting the management and organizational structure, UTM FLNG is paving the way for the construction phase of this project, aiming at a production capacity of 2.8 million metric tonnes per annum by Q4 2028. The company’s managing director and CEO, Julius Rone, mentioned the progress in securing necessary approvals from relevant agencies and regulators, highlighting the company’s determination to achieve project takeoff smoothly.
“The board was thrilled with the advancements, especially on the EPCIC phase, and encouraged the management to ensure the FID is reached by the year’s end,” Rone elaborated. With a forecasted annual production of 2.8 million metric tonnes of natural gas, 450 metric tonnes of LPG, and other liquids for both export and domestic consumption, the project is set to significantly impact Nigeria’s economy.
Rone emphasized the project’s potential to reduce gas costs for household, automobile, and industrial usage, spur employment, and open multi-million Naira business opportunities for Nigerians. He also acknowledged the support of the Nigerian government under President Bola Ahmed Tinubu for fostering an environment conducive to private investments.
Board Members and Project Advocates
The meeting saw participation from prominent figures including representatives from NNPC Ltd and the Delta State Government, alongside UTM Offshore Ltd’s key executives, highlighting a collaborative effort towards realizing Nigeria’s first indigenous FLNG project.
Understanding FLNG Technology
FLNG technology is revolutionizing the way natural gas is produced, liquefied, and stored at sea, facilitating direct transfer to carriers for global distribution. It brings forth an efficient, compact solution for turning underwater gas reserves into liquefied natural gas by processing and chilling it to -162°C, significantly reducing its volume for easier transportation.
UTM Offshore Limited, in association with LNG Investment Management Services, is progressing towards establishing the FLNG facility that would be stationed 60km off Akwa Ibom State’s shore. The vessel is designed to process 176 million standard cubic feet of natural gas and condensate daily, with a 200,000 cubic meter storage capacity.
Implications for Nigeria
The project stands as a beacon for economic growth, promising new foreign exchange earnings from natural gas exports, primarily to Europe. It represents a significant shift towards optimizing small offshore fields and nearshore terminals within regions lacking traditional gas infrastructure.
NJ Ayuk, the executive chairman of the African Energy Council, praised the project as a game-changer in Africa’s gas market. According to Ayuk, the FLNG project will not only secure energy and boost GDP but also transfer technical knowledge and generate employment, aligning with Nigeria’s local content laws.
Backed by Africa-Exim Bank, the venture aims to enhance export revenues and potentially alleviate domestic gas shortages with its extended capacity. As the project progresses towards a final investment decision in 2024, the FEED contract stands as a testament to UTM Offshore’s commitment to this forward-thinking energy development.
As Nigeria forays into FLNG technology, the future looks promising for the nation’s gas industry, marking a crucial step towards innovative energy solutions and economic diversification.
