UTM Offshore said it has signed a deal with the African Export-Import Bank (Afreximbank) to secure up to $5 billion for the development of Nigeria’s first floating LNG producer.
Under the memorandum of understanding, Afreximbank would provide $2 billion for the project’s first phase. Also, the bank further committed to funding another $3 billion for the second phase of the FLNG development, according to a statement by UTM Offshore sent to LNG Prime.
Besides financing the FLNG project, Afreximbank would offer other financial and insurance support services to the development as well.
UTM Offshore’s managing director and chief executive, Julius Rone, and Benedict Okey Oramah, president and chairman of Afreximbank, signed the memorandum on December 7 in Abuja.
The FLNG developer says the agreement paves the way for additional collaboration between the two firms to support a future final investment decision (FID) on the FLNG project.
Abuja-based UTM Offshore has earlier this year received a license from DPR to establish Nigeria’s first FLNG production plant.
It plans to install the liquefaction unit with a capacity of 1.2 million tonnes per annum, sourcing gas from the Yoho field which lies in Oil Mining Lease 104, offshore Nigeria.
Moreover, the facility will receive gas from the existing offshore platform at OML 104.
The unit would target the processing of associated gas currently flared in order to cut carbon emissions and monetize additional reserves for the domestic and global market.
The Nigerian government holds 60% interest in the Yoho crude oil joint venture, through NNPC, while ExxonMobil’s MPN holds the remaining 40% and operates the development that started production back in 2003.
After the DPR approval, UTM Offshore signed a pre-front end engineering and design contract with Japan’s JGC Corporation, but it also selected US-based KBR as the owner’s engineer to review JGC’s work.
UTM Offshore said in the latest statement that preparations for the project “are now in full swing and benefit from robust global and technical expertise.”
It also said that trader Vitol has joined the consortium as off-taker for the LNG.
Completion in 2026
Rone said the FLNG would be the first such project developed by an African company on the continent.
“It will also significantly contribute to the Nigerian government’s agenda of reducing the flaring of associated gas across our industry,” the CEO said.
“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.
Rone added that the unit, when fully completed in 2026, would have a turret and mooring system, gas pretreatment and LNG production modules, living quarters, self-contained power generation and utilities, as well as capacities for LNG storage and offloading.
The 1.2 mtpa FLNG would add to the 22 mtpa Bonny LNG onshore plant already produces.
The joint venture behind the Nigerian six-train plant including NNPC, Shell, Total, and Eni is also adding an additional unit to boost capacity to 30 mtpa in total.