Journalism of Courage

Nigeria’s UTM Offshore Ltd, three foreign technical partners sign multi-billion dollar agreement for first floating LNG facility

``Minister of State for Petroleum Resources, Sylva, promised FG’s commitment to creating enabling environment for business investments in the country, especially in the area of gas development’’

Nigeria’s energy transition programme received a boost on Wednesday with UTM Offshore Limited, an indigenous firm, signing an agreement with three foreign technical partners.

The partners are Kellogg Brown and Root (KBR) UK, Japan Gas Corporation (JGC) and Technip Energies Limited for the commencement of the Front End Engineering Design (FEED) for Nigeria’s first Floating liquefied Natural Gas (FLNG) facility.

At the signing of the agreement in London, the Minister of State for Petroleum Resources, Chief Timipre Sylva, lauded UTM offshore technical partners on the multi-billion dollar FEED agreement for Nigeria’s first floating LNG facility.

Persecondnews reports that the brief but colorful event was held at the Hilton Park Lane London in the UK.

Sylva promised the Federal Government’s continuous support and also creating enabling environment for business investments in the country, especially in the area of gas development.

“The PIA is already improving the petroleum industry’s reputation, paving the way for new investments, creating jobs, supporting the economic diversification agenda and strengthening Nigeria’s ability to fulfill the world’s expanding energy demand,” he said.

Restating the government’s commitment to leverage on natural gas as the nation’s transition fuel with Floating LNG technology as the game changer, Sylva also said: “As a developing nation, we believe that affordable, accessible and reliable energy will continue to be essential to sustaining and powering our growing economy, and to lift millions out of poverty.”

According to him, only gas can help to bridge the current energy gaps in the country.

While stressing the significance of innovation, technology and policy as key drivers of change in the energy sector, Sylva maintained that gas remains the solution to ensuring our energy security, economic competitiveness, and a reduction of greenhouse gas emissions.

“We have already proclaimed that gas is our transition fuel and a destination fuel, and we anticipate that it will be a major component of our energy mix by the year 2060”.

The minister noted that the UTM FLNG will target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets which aligns with the Federal Government’s gas flare commercialization programme (the NGFCP) and the decade of gas agenda.

Sylva said: “There are generous incentives to enable development, distribution, penetration, and utilisation of gas.

“This is why the UTM Offshore project will involve the development and financing of a 1.52 million tonnes per annum (MTPA) FLNG facility with a capacity to process 176 million standard cubic feet of natural gas per day and condensate.”

Also speaking at the signing ceremony, Mr Julius Rone, the Managing Director/CEO of UTM Offshore Ltd, highlighted that Nigeria is keen on and working assiduously towards achieving energy transition.

“Nigeria should start moving from crude oil to gas. Like I have said at several fora, for us in Africa, especially Nigeria, energy transition is steeped in harnessing our abundant gas resources.

“At UTM Offshore, we completely agree with President Muhammadu Buhari that given Nigeria’s potential of about 600 trillion cubic feet of gas, the commodity has the enormous potential to diversify our country’s economy.

“We also agree that the rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country.”

“We thank the President for making gas development and utilization a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investments, and provide the much-needed jobs for our citizens in the country.”

Rone said UTM Offshore is impressed with JGC’s handling of the PRE-FEED components of the FLNG, hence the resolve to re-engage the firm for the main FEED phase .

“JGC Corporation came highly recommended, given the several similar projects the firm had undertaken across the world. Indeed, of the total number of five FLNGs in the world today, JGC Corporation was involved in the design, construction and commissioning of three.

“We do not take for granted the fact that what UTM Offshore Limited is doing is largely novel. It is the first of its kind in Nigeria and we are very excited about this trail-blazing project; the opportunity to build from the scratch, the first Floating Liquefied Natural Gas Facility in country.

“That is why we cannot afford to settle for less hence the reason we contracted JGC Corporation, clearly one of the leading firms in the LNG Construction sector in the world, to provide both the Pre-Front End Engineering Design Services and the main FEED for this first Floating LNG facility in Nigeria,” the UTM Offshore Chief Executive said.

“Today, we are here to consummate the very fantastic working relationship between UTM FLNG, KBR, JGC, Technip Energies Ltd and Cryogas Equipment Private Limited as we sign the main Front End Engineering Design (FEED) for Nigeria’s first Floating Liquefied Natural Gas Facility”.

The FEED contract signing is a follow up to the successful execution of the Pre FEED agreement between UTM offshore limited with JGC, a leading international engineering Design, Procurement and construction firm and within four months of commencement, the Pre-FEED scope was completed.

In his remarks, the President of African Export-Import Bank (AfreximBank), Prof. Benedict Okay Oramah, lauded the tenacious and transparent pursuit of the FLNG project by Mr. Julius Rone and his team members and pledged the full backing of the bank for the FLNG project.

“Nigeria is a gas zone; the country holds the highest reserve of gas in Africa, but for years, we were burning our wealth through gas flaring.

“It is a good thing that President Muhammadu Buhari decided to press the pause button so that Nigeria can optimize the utilization of the country’s gas resources to enhance the lot of the nation, create wealth for the people from what is abundant in the country,” he said.

When completed, the floating LNG shall have an LNG production capacity of 1.2 mmtpa, Turret and Mooring System, Gas pre-treatment modules, LNG production modules, living quarters, self-contained power generation and utilities as well as capacities for LNG storage and offloading.

Persecondnews reports that at the London event were the heads of the regulatory authorities in Nigeria’s oil and gas sector – Engr. Simbi Wabote, the Executive Secretary, Nigeria Content Development and Monitoring Board (NCDMB); Engr. Gbenga Komolafe, the Chief Executive Officer Nigerian Upstream Petroleum Regulatory Commission and Engr. Farouk Ahmed, the Chief Executive Officer, Nigeria Midstream and Downstream Petroleum Regulatory Commission (NMDPRA).

The contract signing event was spiced up by the very firm commitments by the UTM FLNG’s technical partners – the President of JGC Holdings, Mr. Tadashi Ishizuka; the Chief Operating Officer of Technip Energies Limited, Mr. Marco Villa; the Vice-President KBR, Mr. Paul Baillie and Mr. Steve Brann, the Head of LNG Operations at Vitol to deploy their best minds and technologies to actualize Nigeria’s first Floating Liquefied Natural Gas facility being developed by UTM Offshore Ltd.

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