Delta State Government, the Nigerian National Petroleum Company Limited (NNPC)and UTM Offshore Ltd have signed a shareholders’ agreement for the development of the first Floating Liquefied Natural Gas (FLNG) in Nigeria.
Kingsley Emu, Secretary to the State Government (SSG), and Omamuzo Erebe, Solicitor General and Permanent Secretary, Ministry of Justice, signed on behalf of the Delta state government. The Group Chief Executive Officer, Mele Kyari, and Group Managing Director Julius Rone signed for NNPC Limited and UTM Offshore, respectively, on Tuesday.
Under the agreement, the Delta state government will own eight percent share of the project, NNPC Limited 20 percent, and UTM Offshore 72 percent.
During the signing ceremony at the NNPC Towers in Abuja, Governor Sheriff Oborevwori of Delta state expressed that the UTM FLNG Project is the first of its kind to be developed by an indigenous private company in Nigeria.
Governor Oborevwori explained that the state government took an 8 percent equity stake in the floating LNG project due to its conviction of the strategic importance of the project to the national economy. With 40 percent of Nigeria’s proven gas reserves located in Delta state, it was deemed a worthy investment.
He stated, “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 environmental hazards in the Niger Delta by reducing gas flaring. Additionally, our women will benefit from the fuel switch from kerosene and firewood to cleaner energy, improving their health and general well-being. Another benefit we envisage with this project is that it will create job opportunities for our youths, one of the four pillars of our MORE agenda.”
In his remarks, Mr. Mele Kyari, Group Chief Executive Officer of NNPC, commended Governor Oborevwori for promoting gas development in the country and for investing in gas projects. He expressed happiness in collaborating with the Delta State Government and acknowledged its dual role as a supporter of growing gas utilization and an investor in the industry.
Hon Ekprikpe Ekpo, Minister of State Petroleum Resources (Gas), added that it was time for the country to monetize its vast gas reserves for economic development.
Julius Rone, Group Managing Director of UTM, on his part, remarked that the signing ceremony marks a significant milestone in actualizing Nigeria’s first indigenous FLNG. He expects the Final Investment Decision (FID) on the project to be taken before the end of the first quarter of 2024.
Rone thanked the stakeholders for their support, especially the Delta state government for investing in the project.
He stated, “I want to thank the Delta state government for taking an equity stake in this laudable project, which will create other sources of revenue for the state to develop its infrastructure that is highly needed and create employment for the teeming youths of Delta State.”
Delta, NNPCL, UTM offshore sign agreement to develop floating LNG
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