Deal Signed for Nigeria’s First Floating LNG Facility

Deal Signed for Nigeria’s First Floating LNG Facility

/ Oil & Gas / Tuesday, 22 November 2022 08:51

The front-end engineering design (FEED) contract by UTM Offshore Limited, JGC Corporation, Technip Energies and Kellogg Brown & Root Engineering companies for the development of the first floating liquefied natural gas (FLNG) facility in Nigeria has been signed.

UTM Offshore Limited is pioneering the development of the FLNG facility in collaboration with LNG Investment Management Services (LIMS), a subsidiary of Nigeria National Petroleum Corporation PLC (NNPC Limited).

The construction of a $5 billion FLNG facility is expected to process 176 million standard cubic feet of natural gas and condensate per day. According to the official statement, the FEED contract entails conducting, for UTM Offshore Limited, various studies to figure out technical issues and estimate rough investment costs for the FLNG facility prior to the Engineering, Procurement, and Construction (EPC) phase of the project. The timeline for this phase of the FLNG project is 10 months.

Minister of State for Petroleum Resources, Chief Timipre Sylva, announced the signing of the FEED contract, and the African Export-Import Bank facilitated the signing of the MoU to raise funds required for the project.

The contract is expected to bring more deals to Nigeria’s gas sector, as there are numerous undeveloped small projects planned, including FLNG plants.

Nigeria’s Petroleum Industry Act (PIA) 2021, which was recently signed into law, is one of the most audacious attempts to overhaul the petroleum sector in Nigeria. Also read: Africa's Oil and Gas Future: Series of Challenges Ahead

The Act aims to provide legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry. Despite being a major source of revenue, the oil sector lags behind other sectors in terms of GDP contribution. Successful implementation of the PIA is expected to facilitate Nigeria’s economic development by attracting and creating investment opportunities for local and international investors.

The number of offshore gas finds around the world has surged in recent years, with LNG and floating LNG becoming more critical in helping the world’s future energy needs.

Also read:  Slow Transition Towards Renewables: Africa Is Not Alone

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