• Saturday, July 20, 2024
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Afreximbank, UTM Offshore’s $2bn deal berths Nigeria’s first floating LNG project

Afreximbank board approves US$10m grant for AfCFTA adjustment funds

The African Export-Import Bank (Afreximbank) and UTM Offshore have signed a Memorandum of Understanding (MoU) to raise $2 billion for the development of Nigeria’s first Floating Liquefied Natural Gas (FLNG) project.

The MoU covers the raising of $2 billion by Afreximbank for the first phase while the second phase involves another commitment of $3 billion, according to details of the agreement.

The Nigerian company said the agreement would see Afreximbank support a final investment decision (FID) in future. It has said the aim is to reach the first LNG in 2026.

UTM’s CEO Julius Rone said the FLNG project would be the first developed by an African company on the continent.

He added, “Exporting LNG would significantly contribute to the Nigerian government’s hopes about reducing flaring”.

“As Africa’s FLNG industry grows, we are well-positioned to offer attractive project economics by developing shallow water gas reserves, while bringing significant environmental benefits to our industry as a whole,” he said.

Read also: Why Zenith is Nigeria’s biggest bank by market cap

Afreximbank’s Oramah said UTM’s FLNG plan was “not just unique but laudable. UTM Offshore is helping not just Nigeria but the whole of Africa to transition to clean energy and in the process, the firm is creating huge employment opportunities for Nigerians. This is a landmark project that Afreximbank takes very seriously.”

“Truth is that nobody will develop Nigeria but Nigerians,” he said.

The UTM’s project is based on an FLNG vessel at OML 104, which holds the Yoho field. The operator of OML 104 is Mobil Producing Nigeria (MPN) with 40percent. Nigerian National Petroleum Corp. (NNPC) owns the remaining equity.

The FLNG plan would have 1.2 million tonnes per year of capacity, processing 176 million cubic feet per day of gas and condensate.

It would aim to capture reserves that are currently being flared. The project would involve a newly built vessel, UTM said, receiving gas from the existing offshore platforms at OML 104.

Japan’s JGC Corp. won pre-front-end engineering and design (pre-FEED) work on the plan in May, completing this in October. KBR is acting as owner’s engineer, while Vitol is part of the consortium as a future offtake of LNG.

A consultant to the project, Yahuza Kassim, told Energy Voice that the plan involved reaching an FID in the fourth quarter of 2022.