UTM Offshore is nearing a final investment decision (FID) on its $5 billion floating liquefied natural gas (FLNG) project, with key partnerships in focus.
Speaking at Africa Energy Week 2025 on Wednesday, CEO Julius Rone confirmed that the company is close to sealing a collaboration with Seplat and finalising a sale and purchase agreement with global energy trader Vitol.
The FLNG facility, once operational, will supply liquefied petroleum gas (LPG) to Nigeria’s domestic market while exporting the LNG to the international market.
Rone stressed the strategic importance of the project, which aims to boost Nigeria’s energy exports and support local consumption.
Earlier this year, UTM Offshore said “A draft GSA has been shared by the upstream Operator (Seplat) in the NNPC/Seplat Joint Venture with signing envisaged by mid-March 2025.”
It also said that “Draft SPAs, which were prepared several months ago, will consequently be finalised and executed,” which has now been delayed.
What you should know
The floating LNG project, owned by UTM Offshore, was first announced in September 2024 and is Nigeria’s first licensed such project.
The 2.8 million tons per annum (MTPA) offshore gas project is designed to tap flared gas from Seplat’s offshore Yoho field, further boosting the company’s growing gas stake.
This volume will consist of 2.1 MTPA LNG, 500, 000 tons per year of LPG and 200,000 per year of condensate.
Front-end engineering design (FEED) was completed in October 2023, shifting the project closer to the execution phase.
When asked about the actual cost of the project last year, UTM Offshore CEO Julius Rone said, “This is just the engineering phase, and there are other variables. So it is not possible to give you the cost, but it is a multibillion-dollar project.”
Reuters reported that Afreximbank provided $2.1 billion to finance the first phase of construction and has committed a further $3 billion for the second phase.
Once FID is reached, the project will move into the engineering, procurement, construction, installation, and commissioning (EPCIC) phase.
The engineering work is scheduled for completion in 2028, and production will roll out in the first quarter of 2029.
When completed, UTM says the facility will supply all the liquefied petroleum gas to the domestic market. The LNG from the project will be exported to Europe, which as of last month consumed a huge share of Nigeria’s gas.
