Julius Rone, the CEO of UTM Offshore, has assured Nigerians that the ongoing divestment by international oil companies (IOCs) will not disrupt plans for Nigeria’s first floating liquefied natural gas (LNG) project.
Rone, speaking during the African Energy Week in Cape Town, South Africa, told Nairametrics that the project is being developed primarily by indigenous stakeholders.
UTM Offshore, under Rone’s leadership, is at the forefront of establishing the nation’s first floating LNG facility.
Dubbed the “gas kingpin,” Rone revealed that the project will involve key shareholders, including NNPC Limited, Seplat Energy, and the Delta State government.
He further explained that the gas to be utilized for the project is sourced from OML104, where gas flaring is currently taking place.
“The UTM NLG project is being developed by UTM offshore, NNPC Limited, and Delta State government. These are the shareholders of the business. This is the midstream.
“The upstream of the project which is where we are going to get the gas from is owned between NNPC Limited 60% and Seplat Energy 40%. NNPC which is operating in the upstream is also operating in the midstream. Now, the gas we are looking at for this project is in OML104. It is currently being flared.
“This is a solution that will create employment for the Nigerian youth and revenue for the government. That’s why NNPC took 20% of this project; Delta State government took 8% and UTM offshore 72%.
“The issue of the IOC divestment to other countries does not affect this project at all because the majority owner of the gas is NNPC and NNPC is in Nigeria. Seplat, who is taking over from Exxonmobil has expressed interest to play at the midstream, to join the project,” Rone said.
How LNG Floating Operations Will Be Achieved
Speaking further, the gas kingpin detailed how the inaugural operation would be achieved.
He explained that the floating LNG technology would enable the transfer of stranded offshore gas to onshore without relying on pipelines.
Rone also emphasized that this innovation would enhance gas exports, generate revenue for the federal government, and create employment opportunities for young people.
“Floating LNG is a technology that has been proven to be effective. It is to complement the land LNG. The land LNG gets their gas between proximity.
“Floating LNG is to meet the gas that is stranded offshore because we are bringing that gas from that location to shore because of the number of pipelines you’ll need to construct. This is why we have the floating LNG technology that goes offshore to meet the stranded gas that cannot be developed by using the land LNG.
“You now use it to monetize the gas. Export what you want to take out. Bring in what you want to bring into Nigeria, to the domestic market. This will not only create revenue for the government but also employment for the teeming youth in the country,” Rone added.
What you should know
In November 2022, the federal government licensed UTM Offshore, to spearhead the first the first Liquefied Natural Gas (LNG) floating project in Nigeria.
- Ownership of the project will be divided among UTM FLNG, a special-purpose vehicle created by UTM Offshore for the development, NNPCL, and the Delta State Government.
- The project aims to produce 1.5 million metric tonnes of liquefied natural gas (LNG) annually for export markets, 300,000 metric tonnes of liquefied petroleum gas (LPG) per year for domestic use, and a portion of condensate.
The UTM FLNG facility is being developed at the Yoho field, situated at a water depth of 64 meters.