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December 19, 2023

Delta, NNPC, UTM sign shareholders deal for $2.15bn floating LNG

Delta, NNPC, UTM sign shareholders deal for $2.15bn floating LNG

By Obas Esiedesa, Abuja

The Delta State Government, NNPC Limited and UTM Offshore Limited yesterday signed the Shareholders Agreement, SHA, for the construction of the first floating Liquefied Natural Gas project in Nigeria with a capacity of 1.8 billion metric tons per annum.

The Final Investment Decision, FID, on the project which is estimated to cost $2.1 billion is expected to be taken before the end of the first quarter of 2024.

With the shareholders agreement UTM Offshore became the biggest investor in the project with 72 percent while NNPC Limited and the Delta State Government have 20 percent and eight percent stakes respectively.

Speaking at the signing ceremony in Abuja, Delta State Governor, Sheriff Oborevwori said the UTM FLNG Project was the first of its kind to be developed by an indigenous private company in Nigeria.

Oborevwori explained that the state government took eight percent stake in the project because of its conviction of the strategic importance of the project to the national economy.

He pointed out that with Delta hosting 40 percent of Nigeria’s proven gas reserve, investing in the project will bring many benefits to the state.

According to him, “Of particular interest to Delta State Government is the dividend that this UTM FLNG will generate, thus advancing the socio-economic development of our great state. It is expected that over 300,000 metric tonnes of LPG (cooking gas) will be produced and dedicated to the domestic market.

“This project will also help to mitigate the environmental hazards in the Niger Delta by reducing gas flaring. Of course, our women folk will also benefit from the fuel switch from kerosene and firewood to cleaner energy, thus improving their health and general well-being.

“Another benefit we envisage with this project is that it will create job opportunities for our youths, which is one of the four pillars of our MORE agenda”.

Earlier, the Group Chief Executive Officer, NNPC Limited, Mr. Mele Kyari commended the Delta State Governor for not just being a promoter of gas development in the country but for also investing in gas projects.

“We are happy to collaborate with the Delta State Government in this venture. His Excellency is here in two capacities, one is that he is a supporter of growing gas utilization in the country and he is also now an investor in this necessary industry but potentially a valuable industry for all of us”, he added.

He said NNPC was committed to ensure that the project was completed on time and on budget, saying gas would become the major economic driver for the country in the next few years.

Also speaking, the Minister of State Petroleum Resources (Gas), Hon. Ekprikpe Ekpo noted that it was time for the country to begin the monitisation of its huge gas reserves for the development of the economy.

In his remarks, Group Managing Director of UTM, Mr. Julius Rone said the signing ceremony marks another significant milestone in actualizing Nigeria’s first indigenous FLNG.

Mr. Rone said he expects the Final Investment Decision (FID) on the project to be taken before the end of the first quarter of 2024.

He commended the stakeholders for their support especially the Delta State Government for investing in the project.

“I want to thank the Delta State Government for taking an equity on this laudable project which will create other sources of revenue for the state to develop their infrastructure that is highly needed and create employment for the teeming youths of Delta State”, Rone stated.

The agreement was signed by the Secretary to the State Government, Dr Kingsley Emu and Solicitor General and Permanent Secretary Ministry of Justice, Mr Omamuzo Erebe signed for the Delta State Government, while the Group Chief Executive Officer, Mr. Mele Kyari and Group Managing Director Julius Rone signed for NNPC Limited and UTM Offshore respectively.