An agreement was recently signed for the development of the 1st ever Floating Liquefied Natural Gas (FLNG) in Nigeria. The agreement, a shareholder’s agreement to be precise, was inked between the Delta State Government, Nigerian National Petroleum Company (NNPC) Limited, and UTM Offshore Ltd.
NNPC is a dynamic global energy company with businesses and operations across the entire spectrum of the energy value chain. The company was initially a government-owned corporation. It was transformed from a corporation to a limited liability company back in July 2022.
UTM Offshore Limited on the other hand is a privately held Nigerian conglomerate engaged in direct sales and purchase of Nigerian crude oil. The company is also involved in the provision of premium marine logistics and support services in subsea engineering, construction, dredging, equipment rental, leasing, procurement, supply and general labour.
Constitutes of the shareholder’s agreement
According to the shareholder’s agreement for the 1st Floating Liquefied Natural Gas (FLNG) in Nigeria, UTM Offshore will take a 72% equity share in the project. NNPC and Delta State on the other will hold the remaining 20% and 8%, respectively.
The Final Investment Decision (FID), the value of which is approximately US$ 2.1bn, is expected to be taken before the end of the first quarter of 2024. The construction of the 1st FLNG plant in Nigeria will also begin that same year.
Upon its completion, the 1st Floating Liquefied Natural Gas (FLNG) facility in Nigeria will have a capacity of 1.8 billion metric tons per year. Its produce will be for both domestic and export use.
Significance of the 1st Floating Liquefied Natural Gas (FLNG) facility in Nigeria
Speaking to the economic benefits of the project, Sheriff Oborevwori, said that the dividend that this facility will generate will help advance the socioeconomic development of Delta State. Oborevwori is the sitting governor of the said state.
According to him, the project will also help to mitigate the environmental hazards in Niger Delta by reducing gas flaring. Another benefit the governor envisages with this project is the creation of job opportunities for the youth.