Targets 1.7mmtpa of LNG, 300,000 metric tons of LPG
The Nigerian National Petroleum Company (NNPC) Limited and UTM Offshore Limited on Thursday signed the heads of terms agreement which spells out terms of 20 percent equity contribution of the NNPCL in the UTM Floating Liquefied Natural Gas Project in an effort to grow the gas market and make cooking gas accessible and affordable to consumers.
In a statement seen by BusinessDay, the signing ceremony which took place at the NNPCL corporate headquarters in Abuja is a collaborative effort between the two companies to provide clean energy to Nigerians for various uses.
Mele Kyari, chief executive officer of NNPCL, said the NNPCL is committed to the project and that it is of utmost importance to the nation that it must be supported to succeed at all cost.
“No matter the amount of reserves you have underground, if you haven’t brought it up to the surface, you have done nothing. This is why we are very interested in this project and we are going to do our own part to ensure its success,” he said.
According to Kyari, the state-owned company is solidly behind this project. He expressed confidence in the ability and capacity of the company as led by Julius Rone to bring the project to an effective realisation saying the investment of NNPCL in it is indicative of that fact.
On the other hand, Julius Rone, group managing director of UTM Offshore Limited and promoter of the project, said the signing is indicative of UTMOL’s commitment to help bring down and stabilise the price of cooking gas and make the same accessible to more consumers.
He said the benefits include a healthier environment, investment opportunities and thousands of direct and indirect employment opportunities to Nigerians.
The front-end engineering design, FEED, is already on in Lagos, Yokohama and Paris with JGC, Technip and indigenous companies acting as consultants.
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Rone emphasised how important that stage of the project is as it would enable UTMOL to have an idea about the project cost, prepare a full budget and work towards the FID, saying that the stage cannot be skipped.
“Final Investment Decision (FID) is expected to be taken in the fourth quarter of 2023 with planned Project start up in the fourth quarter of 2026. When completed, it will produce 1.7mmtpa of LNG and 300,000 metric tons of LPG (cooking gas) which will be fully dedicated to the domestic market.
“The project is estimated to provide direct employment for 3,000 Nigerians and another indirect employment for an additional 4,000 people. The LPG produced will help bring down the price of cooking gas, improve the socio economic wellbeing of Nigerians, reduce deforestation and attendant carbon emission.”
The facility, which will be located about 60 kilometres offshore at 64 metres water depth, will be built by reputable engineering companies – JGC of Japan and Technip of France, with the support of KBR as the Owners Engineer. The two contracting companies and KBR were the consortium that built the six (6) existing LNG Trains for Nigerian LNG Ltd.
Having got the first outcome, which is level four, the next outcome will be level three while the final outcome will be level two. At the same time, the Engineering Procurement and Construction EPC draft contract is being worked with Templers, UTMOL’s lawyers and their international counsel, White and Case.
“We understand how important this is to Nigerians and Nigeria’s economy, and we are committed to enlisting and partnering with only the best to actualise this project. We are leaving no stone unturned in terms of the quality of companies that will deliver this project,” he said.
According to him, the aim of the company is to complete the FEED towards the end of October 2023, and start work on the Open Book Estimate (OBE) for the EPC contract in November 2023.
