The African Export-Import Bank (Afreximbank), in conjuction with the Nigeria’s marine and services group, UTM Offshore Limited, on Tuesday in Abuja, signed a Memorandum of Understanding (MoU) to raise $5 billion for the development of Nigeria’s first floating liquefied natural gas (FLNG) project.
Continental bank raising $2 billion to support the first phase of the deal with a commitment to fund the second phase of the project by another $3 billion.
Signed by the Group Managing Director/CEO of UTM Offshore, Mr. Julius Rone, and President and Chairman of Afreximbank, Dr. Benedict Okey Oramah, the MoU paves the way for additional collaboration between the two entities to support a future final investment decision (FID) on the project, which UTM has been studying and conceptualising since 2020.
Preparations for the project are now in full swing and benefit from robust global and technical expertise. The pre-Front End Engineering Design (Pre-FEED) contract was awarded to JGC Corporation of Japan in May 2021 while KBR was appointed Owners Engineer. Global energy and commodities trader, Vitol, has also joined the consortium as an off-taker for the LNG.
“The UTM Offshore FLNG will be the first of such a project developed by an African company on the continent,” Rone said, adding, “It will also significantly contribute to the Nigerian government’s agenda of reducing the flaring of associated gas across our industry.”
According to him, “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.”
The project involves the development and financing of a 1.2 million tonnes per annum FLNG facility with a capacity to process 176 MMscfd of natural gas and condensate.
The unit would target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets.
Oramah, at the signing ceremony, commended Rone and his UTM team for rising up to one of the greatest challenges of this era.
Across the world, nations are evolving climate change goals; Africa has not been able to leverage the abundant opportunities in the continent to help meet the global climate change goals,” the bank’s chief said, explaining, “That is why Afreximbank considers what UTM Offshore is doing, the development of Nigeria’s first FLNG not just unique but laudable.
