UTM FLNG Limited to Supply 500,000 Tonnes of LPG Annually to Nigeria’s Domestic Market
UTM Floating LNG Limited is set to revolutionize Nigeria’s liquefied petroleum gas (LPG) market with an annual production capacity of 500,000 tonnes, beginning in 2028. The announcement was made by the Group Managing Director/CEO, Dr. Julius Rone, during the Africa Energy Week (AEW) held in Cape Town, South Africa.
Dr. Rone emphasized the company’s commitment to reducing Nigeria’s dependency on LPG imports, curbing associated costs, and stabilizing local prices. By dedicating the total output of its floating liquefaction facility to the domestic market and selling in Naira, UTM FLNG aims to alleviate the pressures of foreign exchange fluctuations and import-related expenses, ultimately making LPG more affordable for households and small businesses.
A First in Nigeria’s Energy Landscape
The project, Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility, is being developed in partnership with the Nigerian National Petroleum Company (NNPC) Limited and the Delta State government. Collaborators, including JGC Corporation, Technip Energies, and Kellogg Brown & Root (KBR), signed a Front-End Engineering Design (FEED) contract on November 16, 2024, in London, marking a significant milestone for the initiative.
According to Dr. Rone, the FLNG facility represents a modular and flexible solution to commercialize Nigeria’s stranded gas reserves, particularly in shallow and deepwater oilfields. The facility’s initial focus will be on the Yoho shallow water oilfields, with plans to replicate the model in other locations where NNPC has joint venture stakes.
Driving Local Value and Economic Benefits
The exclusive sale of LPG domestically is expected to:
- Mitigate reliance on expensive imports.
- Relieve pressure on Nigeria’s foreign reserves.
- Support the government’s LPG penetration program by making the product more affordable.
- Enhance the utilization of stranded gas resources, fostering economic growth and job creation.
“The FLNG model is a quick-to-market option for areas lacking infrastructure like pipelines, enabling the government to monetize stranded gas resources effectively,” Dr. Rone stated.
Strategic Partnerships and Investment
The $5 billion FLNG project, funded by the African Export-Import Bank, reflects increasing confidence in Nigeria’s gas sector. Discussions are ongoing with international oil companies (IOCs) like ExxonMobil and Seplat Energy to utilize stranded gas as feedstock.
With plans to make a Final Investment Decision (FID) by December 2024, UTM FLNG Limited is poised to begin construction soon after, solidifying its role in Nigeria’s gas development strategy as outlined in the Petroleum Industry Act (PIA).
Dr. Rone praised the federal government’s gas-friendly policies and incentives for attracting local and foreign investors, noting that gas development is critical to Nigeria’s energy transition and economic diversification.
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Looking Ahead
By leveraging its FLNG facility, UTM Floating LNG Limited aims to stimulate Nigeria’s gas sector, create employment opportunities, and position the country as a leader in gas monetization in Africa.
“African nations must harness their natural gas resources to drive development and create opportunities for their citizens,” Dr. Rone concluded.
Source: UTM FLNG Limited
