Delta State Government, Nigerian National Petroleum Company Limited (NNPCL), and UTM Offshore Ltd have signed a shareholders agreement for the development of the first floating LNG (FLNG) in Nigeria.
Secretary to the State Government (SSG), Dr Kingsley Emu, Solicitor General and Permanent Secretary Ministry of Justice, Omamuzo Erebe, signed for the Delta State Government, while the Group CEO, Mele Kyari, and Group Managing Director, Julius Rone, signed for NNPC Limited and UTM Offshore, respectively.
With the agreement, Delta State Government will own an 8% share of the project, NNPC Limited 20%, and UTM Offshore 72%.
Speaking during the Signing Ceremony at the NNPC Towers, Abuja, at the Weekend, 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.
Governor Oborevwori explained that the State Government took 8% equity in the FLNG project because of its conviction of the strategic importance of the project to the national economy, adding that with 40% of Nigeria’s proven gas reserves in Delta State, it was a worthy investment.
According to him, the deal marked a significant milestone in the development of the project, expressing hopes that construction will begin next year.
He said, “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 000t 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”.
On his part, Kyari said, “we are happy to collaborate with the Delta State Government in this venture. The State Government is here in two capacities, one as a supporter of growing gas utilisation in the country, and also now as an investor in this necessary industry but potentially a valuable industry for all of us”.
Also speaking, the Minister of State, Petroleum Resources (Gas), Ekprikpe Ekpo, noted that it was time for the country to begin the monetisation of its huge gas reserves for the development of the economy.
Adding his voice, the Group Managing Director, UTM Offshore, Julius Rone, said the signing ceremony marked another significant milestone in actualising Nigeria’s first indigenous FLNG.
While expressing his expectations that the final investment decision (FID) on the project would be taken before the end of 2024, Rone commended the stakeholders for their support, especially the Delta State Government for investing in the project.
He said, “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”.