UTM pushes back FID on Nigeria’s first FLNG project

Nigeria’s UTM Offshore has again delayed a final investment decision on Nigeria’s first floating LNG project.

The company’s managing director and chief executive, Julius Rone, told LNG Prime on Monday that UTM now expects to take the decision to build the project in the second quarter of this year.

Rone said in December last year that he expected FID in the first quarter of this year. Prior to that, he said in July that UTM was targeting FID by the end of 2023.

He said on Monday that UTM has recently 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 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 of the FLNG project, NNPC owns 20 percent, and the Delta State government owns 8 percent.

FLNG

UTM said that the FLNG facility is expected to produce up to 2.72 million metric tonnes per annum (mtpa) of gas, including up to 0.45 mtpa of LPG which will be dedicated to the domestic market.

This is a major increase in the project’s capacity as Rone previously said that the first FLNG would have a capacity of 1.5 mtpa, while the company also aims to install a second FLNG offshore Nigeria.

Rone said that this capacity is planned for only one FLNG and it is the result of the front-end engineering and design (FEED) work completed by France’s Technip Energies and Japan’s JGC.

UTM awarded the FEED contract to the two firms in November 2022. The firm also selected US-based KBR as the owner’s engineer.

Under the FEED, Technip Energies worked on the hull and the mooring system design, while JGC worked on the topsides design.

The FLNG, expected to go online in 2028, will process associated gas from the Yoho field currently flared in order to cut carbon emissions and monetize additional reserves for the domestic and global market.

Yoho field lies in Oil Mining Lease (OML) 104, offshore Nigeria. ExxonMobil’s unit MPN holds a 40 percent interest in the joint venture and NNPC holds a 60 percent stake.

EPCIC contract

Rone said in December that the company plans to award the engineering, procurement, construction, installation, and commissioning (EPCIC) contract to Technip Energies and JGC in May this year.

He said on Monday that the company expects to award the contract in the second quarter.

Rone did not comment on the price tag of the deal.

Following the contract award, the two firms would then subcontract a shipbuilder in China to build the hull and integrate topsides, he previously said.

Shipbuilding sources previously told LNG Prime that China Merchants Heavy Industry and Cosco Shipping (Qidong) Offshore are competing to win the contract.

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