The Nigerian National Petroleum Company (NNPC) Limited and UTM Offshore Limited have entered into a Heads-of-Terms (H0T) agreement for the UTM floating liquefied natural gas (FLNG) project.
The agreement outlines the terms of the 20 percent equity contribution from the national oil firm, marking a collaborative effort to provide clean energy solutions for Nigerians.
The signing ceremony, held at NNPC’s headquarters in Abuja on Thursday, marks a pivotal moment in the project’s progress.
Julius Rone, Group Managing Director of UTM Offshore Limited, highlighted that the front-end engineering design (FEED) for the project is already underway in Lagos, Yokohama, and Paris, with JGC Holdings, Technip, and indigenous companies serving as consultants.
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He said: “Final investment decision (FID) is expected to be taken in the fourth quarter of 2023 with planned project startup in the fourth quarter of 2026. When completed, it will produce 1.7 mmtpa of LNG and 300,000 metric tons of LPG (cooking gas) 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 socio-economic wellbeing of Nigerians, reduce deforestation and attendant carbon emissions.
“The facility, which will be located about 60km offshore at 64m water depth, will be built by reputable engineering companies — JGC of Japan and Technip of France — with the support of KBR as the owners engineer.
“It is worthy of note that the two contracting companies and KBR were the consortium that built the six existing LNG Trains for Nigerian LNG Ltd.
“Having got the first outcome, which is level four, the next outcome will be level three while the final outcome will be level two. At the same time, the engineering procurement and construction (EPC) draft contract is being worked on with Templers, UTMOL’s lawyers, and their international counsel, White and Case.
“We understand how important this is to Nigerians and Nigeria’s economy, and we are committed to enlisting and partnering with only the best to actualize this project. We are leaving no stone unturned in terms of the quality of companies that will deliver this project.”
Rone said apart from the international companies that have been contracted to build the facility, the partnership with NNPCL signalled another milestone in his company’s dedication to ensuring that the project is not only realized but also meets the set objectives.
“Our aim is to complete the FEED towards the end of October 2023, and hopefully start work on the open book estimate (OBE) for the EPC contract in November 2023,” he added.
NNPC’s Chief Executive Officer, Mele Kyari, expressed full support for the project, acknowledging its strategic significance in enhancing Nigeria’s energy sector.
He said: “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 NNPCL is solidly behind this project.”