Nigeria’s oil regulatory authority has awarded UTM Offshore Limited the country’s inaugural licence to operate a floating liquefied natural gas (FLNG) facility, positioning the firm to harness flared gas from ExxonMobil’s Oil Mining Lease 104 (Yoho field) in the resource-rich Niger Delta. This development underscores Nigeria’s strategic effort to monetise its vast natural gas reserves, which exceed 209 trillion cubic feet, as it grapples with the ongoing economic loss of over $1 billion annually due to flaring, according to government estimates.
The UTM-operated vessel, with an upgraded capacity of 2.8 million tons per annum (MTPA) from an initial 1.2 MTPA, signals the growing demand for LNG, particularly within export markets. Farouk Ahmed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), hailed the project as a milestone in Africa’s broader ambition to unlock its underutilised gas resources.
Julius Rone, CEO of UTM Offshore, revealed that the engineering phase would culminate in 2028, with production expected to commence in the first quarter of 2029. “We are currently in the engineering phase, and with various factors at play, it’s premature to provide a definitive cost estimate, but it’s undoubtedly a multibillion-dollar investment,” Rone remarked.
The facility is poised to deliver 500,000 metric tons of liquefied petroleum gas (LPG) to the domestic market, while the bulk of the liquefied natural gas will be exported, tapping into surging global demand. UTM’s ambitious project is supported by a $2.1 billion financing package from Afreximbank for the initial phase, with an additional $3 billion committed for the subsequent stage of construction.
