UTM Offshore secures 15-year gas supply deal, moves $3bn FLNG project closer to FID

UTM Offshore has secured a 15-year gas supply agreement, clearing a major hurdle towards reaching a final investment decision (FID) on its $3 billion Floating Liquefied Natural Gas (FLNG) project, which is now expected in the fourth quarter of 2026 following earlier delays.

Under the agreement, a joint venture between NNPC Ltd and Seplat Energy Producing Nigeria Unlimited will supply 200 million standard cubic feet of gas per day (5.7 million cubic metres) to the UTM FLNG facility. The project is designed to produce 1.8 million tonnes of liquefied natural gas (LNG) annually using gas from the Yoho field.

Speaking at the signing ceremony in Abuja, Julius Rone, UTM Offshore Chief Executive Officer, said the agreement provides the long-term gas supply framework required to move the project into its financing, construction and operational phases.

“The execution of this agreement establishes the long-term feed gas framework needed to advance project financing, construction and operations,” Rone said.

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He added that the gas supply arrangement would strengthen investor confidence, provide certainty for lenders and LNG buyers, and position the project to achieve a final investment decision in the fourth quarter of 2026.

The FLNG project is jointly owned by UTM Offshore, which holds a 72 per cent stake, NNPC Ltd with 20 per cent, and the Delta State Government, which owns the remaining 8 per cent.

The project received Nigeria’s first licence for a floating LNG export facility in 2024, supporting the Federal Government’s strategy to commercialise stranded natural gas resources and increase the country’s LNG export capacity.

Although Nigeria possesses one of the largest proven natural gas reserves in Africa, the country has faced longstanding challenges in converting these resources into commercial exports and domestic industrial feedstock due to funding limitations, inadequate infrastructure, and regulatory uncertainty.

According to UTM Offshore, the project’s Front-End Engineering and Design (FEED) was completed in 2023 by JGC and Technip Energies, marking a significant milestone towards its development.