Nigeria floating liquefaction specialist UTM Offshore has finalised an important deal that see the government of Delta State joining state-owned NNPC in acquiring a significant stake in its Yoho Floating Liquefied Natural Gas (FLNG) project which is close to being sanctioned.
A final investment decision of the 1.5-million-tonne-per-annum FLNG vessel is due to be made in early 2024, assuming the project secures the necessary finance and a deal can be ratified covering the use of associated gas from Yoho.
The project equity has NNPC, UTM Offshore and the Delta State Government holding 20 percent, 72 percent and 8 percent stakes respectively.
Apart from producing over 300,000 metric tonnes of LPG (cooking gas) which will be dedicated to the domestic market, the partners said the resource will be used to revolutionise the nation’s power and industrial sectors.
These are things to know about an FLNG facility
What is FLNG?
The FLNG system is a complete facility handling the offshore LNG storage, processing and transportation. These giant ships use the same systems as land-based LNG plants, which means gas can be processed closer to the source without the need to order miles of pipeline to bring the gas to the nearest facility onshore.
This processing power opens up huge new sources of potential, miles away from shore, that would have previously been too difficult or expensive to exploit.
How does FLNG work?
Natural gas is extracted from the seabed and transported by pipeline to the nearby FLNG. On board, it will be treated and liquefied – a process that involves supercooling the gas to -160 degrees Celsius to turn it into a liquid.
The liquid gas is then stored onboard in storage tanks, until it is delivered to LNG carriers for transport to treatment plants.
Advantages of LNG
LNG facilities extract natural gas trapped deep underground and over-cooled into a transparent, non-toxic liquid. This reduces its mass by 600 times, which means it can be transported more easily and safely to gas recycling plants around the world. These plants convert it back into a combustible gas, which can then be burned to generate heat and electricity.
Natural gas is one of the cleanest and safest energy sources available today. When burned, it produces half as much CO2 as coal and 10 percent less air pollutants. This is why, in recent years, the demand for natural gas has increased dramatically.
In 2000, less than 100 million tons of LNG per year were produced and rose to 284 million tons in 2017, according to NEF Fircroft, an energy engineering staffing company. The growing reliance on fuel in Asia and Africa has led to an increase in production in the US, which means usage is expected to continue to grow over the next few years.
Local benefits
Sheriff Oborevwori, governor of Delta state said the gas rich state was particularly interested in the socio-economic benefits. He noted the expected delivery of more than 300,000 tonnes of LPG from the project that would go to the domestic market.
“This project will also help to mitigate the environmental hazards in the Niger Delta by reducing gas flaring. Of course, our women folk will also benefit from the fuel switch from kerosene and firewood to cleaner energy, thus improving their health and general wellbeing.
