Delta State Government, NNPC, and UTM Offshore Sign Historic Agreement for Nigeria’s First Floating LNG Project
Delta State Government, Nigerian National Petroleum Company Limited (NNPC), and UTM Offshore Ltd have officially signed a Shareholders Agreement for the development of Nigeria’s first Floating Liquefied Natural Gas (FLNG) project. The signing ceremony took place at the NNPC Towers in Abuja.
Key Points:
- Shareholders Agreement: The agreement outlines the share distribution for the FLNG project, with Delta State Government holding 8%, NNPC Limited having 20%, and UTM Offshore owning the majority share at 72%.
- Indigenous Development: The UTM FLNG Project is a groundbreaking initiative, being the first of its kind developed by an indigenous private company in Nigeria.
- Strategic Importance: Delta State Government’s decision to take an 8% equity stake is based on the strategic significance of the project to the national economy. With 40% of Nigeria’s proven gas reserves located in Delta State, the investment is deemed crucial.
- Dividend Generation: The project is expected to generate dividends, contributing to the socio-economic development of Delta State. It aims to produce over 300,000 metric tonnes of Liquefied Petroleum Gas (LPG or cooking gas) for the domestic market.
- Environmental Impact: The FLNG project will play a role in reducing environmental hazards in the Niger Delta by minimizing gas flaring. Additionally, it is anticipated to improve the health and well-being of women by promoting a switch from kerosene and firewood to cleaner energy.
- Job Creation: The project is envisaged to create job opportunities for youths, aligning with the development agenda of Delta State.
- Construction Timeline: Construction of the FLNG project is expected to commence in the coming year, marking a significant milestone in Nigeria’s indigenous gas development.
- Acknowledgments and Commendations: Governor Sheriff Oborevwori commended the foresight of the immediate past Governor, Senator Ifeanyi Okowa, as well as other stakeholders, regulators, and financial institutions for their support in arranging financing for the project.
- FID Expectations: The Group Managing Director of UTM, Mr. Julius Rone, anticipates that the Final Investment Decision (FID) for the project will be made before the end of the first quarter of 2024.
- Collaboration and Support: NNPC CEO, Mr. Mele Kyari, expressed appreciation for Delta State Government’s support and collaboration, highlighting the state’s role as a supporter and investor in the gas sector.
Conclusion: The signing of the Shareholders Agreement for Nigeria’s first FLNG project represents a significant stride in the country’s journey toward indigenous energy development. With a focus on economic, environmental, and social benefits, the project holds promise for the nation’s energy landscape and Delta State’s growth agenda. The anticipated Final Investment Decision in early 2024 signals a positive trajectory for this pioneering venture.
