Nigerian National Petroleum Corp. (NNPC), UTM Offshore and Delta State have signed a shareholders’ agreement on a floating LNG plan.
Under the agreement, Delta State is taking an 8% stake in the project. NNPC will have 20%, while UTM has reduced its interest to 72%. NNPC acquired its 20% stake in July this year.
Signing the deal to enable gas exports, NNPC head Mele Kyari expressed the aim of using gas to “bring about a revolution” in Nigeria. He defined the outcomes as prosperity and value creation.
“Not just creating gas for export but progressing on all our initiatives of bringing gas into the domestic market. Our backbone infrastructures are almost ready to ensure we achieve that. Once that happens, we will see the immediate impact on the power sector, gas-based industries and several other collateral value that this will create,” the CEO said.
The signing ceremony took place at NNPC’s headquarters in Abuja.
The project will produce 1.81 to 2.72 million tonnes per year of LNG. It will be based on the Yoho field, operated by ExxonMobil. It holds more than 200 trillion cubic feet of gas, UTM has said.
UTM managing director Julius Rone said he expected to take the final investment decision (FID) on the project in the first quarter of 2024. The company had hoped to reach FID by the end of this year, targeting start up for the fourth quarter of 2026.
Local benefits
Governor Sheriff Oborevwori said that Delta State was particularly interested in the socio-economic benefits. He noted the expected delivery of more than 300,000 tonnes of LPG from the project that would go 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 wellbeing.
Kyari went on to say the company was promoting “several” FLNG schemes and was willing to take practical steps to secure them.
NNPC signed a memorandum of understanding (MoU) with China’s Wison (Nantong) Heavy Industry Co. at COP28, in Dubai, recently. The companies said the agreement was for an FLNG scheme in Nigeria.
NNPC and Wison agreed to work together on project development in order to reach an investment decision.
Nigerian officials speaking at COP28 said the country aspired to shift from coal, wood and oil to gas. “We seek large-scale investments in this area as well as in renewable energy,” Minister of Environment Balarabe Lawal said.