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UTM Offshore expands Floating LPG project, eyes fresh investors

UTM Offshore expands Floating LPG project, eyes fresh investors

UTM Offshore has selected the shipyard to construct the hull for Nigeria’s pioneering floating liquefied natural gas (FLNG) vessel.

This project’s capacity is anticipated to be significantly larger than initially planned and may soon attract a new investor, according to a report by Upstreamonline, an intelligent oil and gas publication.

The FLNG project spearheaded by UTM will utilise gas from the OML 104 block, a shallow-water area set to be operated by Seplat Energy, following its acquisition of certain ExxonMobil assets in Nigeria, pending official approval.

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Originally, the plan was for the FLNG vessel to process associated gas currently being flared from the Yoho field. However, new resources discovered in OML 104 have enabled an expansion of the vessel’s capacity.

In July 2023, Mele Kyari, chief executive officer of the NNPC stated that UTM would take a Final Investment Decision on the floating LNG project by the fourth quarter of 2023.

However, in March 2024, Julius Rone, UTM’s managing director and chief executive, told LNG Prime that UTM now expects to decide to build the project in the second quarter of this year.

He also announced that UTM had requested the Nigerian Content Development and Monitoring Board (NCDMB) to invest in the project and to accelerate key approvals that would fast-track the project’s development.

With an equity investment, NCDMB would join the state-owned Nigerian National Petroleum Company (NNPC) and the Delta State government as a partner in UTM’s FLNG project.

In December, UTM signed a shareholders agreement (SHA) for the FLNG project with NNPC and the Delta State government.

Under the deal, UTM holds 78 percent equity in the FLNG project, NNPC owns 20 percent, and the Delta State government owns 8 percent.

Nigeria’s previous Department of Petroleum Resources (DPR) granted UTM FLNG Limited a license to operate the FLNG on Oil Mining Lease (OML) 104 in February 2021.

Afterwards, in November 2022, UTM Offshore Limited, signed a front-end engineering design (FEED) contract with three technical partners, Kellogg Brown and Root (KBR) UK, Japan Gas Corporation (JGC) and Technip Energies Limited, for the commencement of the FEED for Nigeria’s first floating liquefied natural gas (FLNG) facility.

FLNG enables the production, liquefaction, and storage of natural gas at sea, with LNG being directly transferred from the floating facility to carriers for global distribution.

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Natural gas extracted from underwater fields is processed and chilled to -162° Celsius (-260° Fahrenheit), reducing its volume by 600 times to form LNG. The FLNG facility’s innovative design condenses the functions of a traditional land-based LNG plant into a much smaller space.

The new vessel will receive gas feedstock from an existing offshore facility, process it to LNG standards, liquefy it, store the LNG, and offload it to carriers.

Upon completion, the FLNG facility will have a production capacity of 1.52 million tonnes per annum (Mtpa). It will feature a turret and mooring system, gas pre-treatment modules, LNG production modules, living quarters, self-contained power generation and utilities, and storage and offloading capacities.

Capable of processing 176 million standard cubic feet of natural gas per day and condensate, the FLNG facility will also have a storage capacity of 200,000 cubic meters.

Positioned 60 kilometres off the coast of Akwa Ibom State, it aims to serve the global energy market.