NNPC signs agreement with UTM Offshore on natural gas
The Nigerian National Petroleum Corporation, NNPC, has signed a Heads of Agreement with UTM Offshore Limited for a 20% equity contribution of the NNPC in the UTM Floating Liquefied Natural Gas, FLNG, project.
The milestone will see significant improvement in access to gas-based cooking in the country.
The UTM Floating Liquefied Natural Gas, FLNG, project is a planned FLNG vessel set to produce 176 million cubic feet of gas per day from the Yoho Field.
The Yoyo Field is located 25 miles offshore in eastern Nigeria, about 41 miles southwest of the Qua Iboe Terminal. The terminal is located at 4°, 1.8’N, 7°, 31.3’E in approximately 55 meters of water depth.
Have You Read
*Climate Change: 5 ways to lower your carbon emissions quickly
*Climate change of summers
*Africa is splitting into two
NNPC-UTM Offshore agreement
The agreement lays out the terms of the NNPC’s 20% equity contribution of the FLNG project, and represents a milestone in advancing domestic gas utilisation in Nigeria.
The African Energy Chamber, AEC, believes that this is a monumental step towards scaling up access to clean cooking solutions in Africa, with the project and agreement serving as a blueprint for other resource-rich countries across the continent.
With the agreement, liquefied petroleum gas, LPG, will become increasingly accessible to the Nigerian market, thereby reducing costs of the product while improving health, environmental protection and employment across the country.
The agreement showcases the NNPC’s commitment to ensuring domestic gas resources reap tangible rewards for the local population.
According to NNPC Group Managing Director Mele Kyari, “No matter the amount of reserves you have underground, if you haven’t brought it up to the surface, you have done nothing.
“This is why we are very interested in this project and we are going to do our own part to ensure its success. Be assured that NNPC is solidly behind this project.”
Signed at the NNPC headquarters in Abuja last week, the agreement serves as the next step towards finalising this important project.
Project stages
The FLNG facility is expected to be complete by 2026, and comprises a turret mooring system, gas pre-treatment modules, Liquefied Natural Gas (LNG) production modules, living quarters, self-contained power generation and utilities alongside storage and offloading.
Last year, UTM Offshore inked the Front-End Engineering and Design contract with Kellogg Brown and Root; Japan Gas Corporation; and Technip Energies.
According to Julius Rone, Group Managing Director of UTM Offshore, “Final Investment Decision is expected to be taken in the fourth quarter of 2023 with planned project start up in the fourth quarter of 2026.
“When completed, it will produce 1.7 million tons per annum of LNG and 300,000 metric tons of LPG which will be fully dedicated to the domestic market.
“The project is estimated to provide direct employment for 3,000 Nigerians and indirect employment for an additional 4,000 people. The LPG produced will help bring down the price of cooking gas, improve the socioeconomic wellbeing of Nigerians, reduce deforestation and carbon emissions.”
Rone believes that the agreement is a testament to the company’s commitment to advancing access to clean cooking solutions in the country.
With the new agreement, the partners have formalised the domestic LPG components and have additionally secured the backing of one of the country’s biggest energy firms, the national oil company NNPC.
“The agreement signed between the NNPC and UTM Offshore is a testament to the commitment of the Nigerian government to advancing access to clean cooking solutions in Africa.
“Nigeria has over 200 trillion cubic feet of proven gas reserves, resources which hold immense opportunities for the country and wider region.
“Rather than continue with historic trends which would see African oil and gas exported as unprocessed hydrocarbons, both the NNPC and UTM Offshore have prioritized domestic consumption.
“This project is a milestone development for the country and the Chamber commends the efforts being undertaken by the project partners to get it off the ground,” states NJ Ayuk, Executive Chairman of the AEC.