African Energy Chamber (AEC) has said Nigeria is progressively moving towards addressing its huge energy gap with the signing of the nation’s first Floating Liquefied Natural Gas (FLNG) project.
The agreement was signed between UTM Offshore, the Nigerian National Petroleum Company Limited, NNPCL, and Delta State Government in Abuja.
In line with the AEC’s commitment to African resource sovereignty, this partnership marks a significant step towards eliminating energy poverty and advancing the continent’s gas monetisation agenda.
Notably, the UTM FLNG project is the first of its kind to be developed by an indigenous private company in Nigeria, reflecting the strategic importance of the project and its impact on national energy security. UTM Offshore will take a 72 per cent equity share in the project, with NNPC and Delta State holding the remaining 20 per cent and eight per cent, respectively.
The project will feature a capacity of 1.8 billion metric tons per year for domestic use and export and its Final Investment Decision – valued at $2.1 billion – is expected to be taken before Q1’24, with construction to begin next year.
Speaking to the economic benefits of the project, Delta State Governor, Sheriff Oborevwori, stated: “Of particular interest to Delta State government is the dividend that this UTM FLNG will generate, thus advancing the socioeconomic development of our great state.
“The project will also help to mitigate the environmental hazards in Niger Delta by reducing gas flaring. Another benefit we envisage with this project is that it will create job opportunities for our youths,” he said.
The chamber agreed that the UTM FLNG project – and other African gas monetization initiatives like it – provide pathways to cleaner energy alternatives, reduced flaring and local job creation.
Gas monetisation is at the heart of the AEC’s commitment to a Just Transition, which enables African nations to lead their own resource development and utilise natural gas as a transitional energy source to stimulate downstream industry and finance green projects.
Holding the largest proven gas reserves in Africa – 202 trillion cubic feet, to be precise – Nigeria requires substantial investments across its natural gas value chain, from upstream facilities to processing, power plants and associated infrastructure.
Under its National Gas Expansion Programme launched in 2020, Nigeria is seeking to expand its domestic gas network, boost gas-based industrialisation and eliminate gas flaring.