Nigeria’s quest for energy transition received a huge boost on Wednesday when an indigenous firm, UTM Offshore Limited signed agreements with three technical partners, Kellogg Brown and Root (KBR) UK, Japan Gas Corporation (JGC) and Technip Energies Limited, for the commencement of the Front End Engineering Design (FEED) for Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility. The Agreements were signed at a brief but colourful event at the the Hilton Park Lane, London, UK.
The FEED contract with the three firms essentially entails conducting for UTM Offshore Limited,various studies to figure out technical issues and estimate rough investment cost for the FLNG facility prior to the Engineering, Procurement and Construction (EPC) phase of the project. The time line for this phase of the the FLNG project is 10 months.
The FEED contract signing is a follow up to the successful execution of the pre-FEED agreement between UTM Offshore Limited with JGC, a leading International Engineering Design, Procurement and Construction firm. The Pre-FEED scope was completed within four months from commencement date. KBR provided due diligence on the JGC scope by conducting a third-party review of all deliverables from JGC during the Pre-FEED.UTM Offshore Limited entered into the pre-FEED agreement with JGC and KBR in May 2021.
Speaking at the FEED contract signing event, the Minister of State for Petroleum Resources, Chief Timipre Sylva applauded the pioneering efforts of Mr. Julius Rone and UTM Offshore Limited and said the Federal Government will continue to support and create the enabling environment for business investments in the country, especially in the area of gas development.
“The PIA is already improving the petroleum industry’s reputation, paving the way for new investments, creating jobs, supporting the economic diversification agenda and strengthening Nigeria’s ability to fulfil the world’s expanding energy demand,” he said. The Minister reiterated the Federal Government of Nigeria’s determination to leverage on natural gas as the nation’s transition fuel with Floating LNG Technology as the game changer. “As a developing nation, we believe that affordable, accessible and reliable energy will continue to be essential to sustaining and powering our growing economy, and to lift millions out of poverty,” he said adding that only gas can help to bridge the current energy gaps in the country.
While stressing the significance of innovation, technology and policy as key drivers of change in the energy sector, Sylva again maintained that “no doubt, gas remains the solution to ensuring our energy security, economic competitiveness, and a reduction of greenhouse gas emissions. We have already proclaimed that gas is our transition fuel and a destination fuel, and we anticipate that it will be a major component of our energy mix by the year 2060”.
The minister noted that the UTM FLNG will target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets, which aligns with the Federal Government’s gas flare commercialization program (The NGFCP) and the decade of gas agenda.
“There are generous incentives to enable development, distribution, penetration, and utilisation of gas,” Sylva said adding that “this is why the UTM Offshore project will involve the development and financing of a 1.52 million tonnes per annum (MTPA) FLNG facility with a capacity to process 176 million standard cubic feet of natural gas per day and condensate.”
At the signing ceremony, the Managing Director and Chief Executive Officer of UTM Offshore Limited, Mr. Julius Rone underscored the fact that like most other nations of the world, Nigeria is keen on, and working assiduously towards achieving energy transition. He said Nigeria’s energy transition necessarily should start with moving from huge dependence on crude oil to gas. “Like I have said in several fora, for us in Africa, especially Nigeria, energy transition is steeped in harnessing our abundant gas resources. At UTM Offshore, we completely agree with President Muhammadu Buhari that given Nigeria’s potential of about 600 trillion cubic feet of gas, the commodity has the enormous potential to diversify our country’s economy. We also agree that the rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country,” Mr. Rone said.
“We thank the President for making gas development and utilization a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investments, and provide the much-needed jobs for our citizens in the country,” he added.
Rone disclosed that UTM Offshore is impressed with JGC’s handling of the pre-FEED component of the FLNG project hence the resolve the reengage the firm for the main FEED Phase.
“JGC Corporation came highly recommended, given the several similar projects the firm had undertaken across the world. Indeed, of the total number of five FLNGs in the world today, JGC Corporation was involved in the design, construction and commissioning of three. We do not take for granted the fact that what UTM Offshore Limited is doing is largely novel. It is the first of its kind in Nigeria and we are very excited about this trail-blazing project; the opportunity to build from the scratch, the first Floating Liquefied Natural Gas Facility in country. That is why we cannot afford to settle for less hence the reason we contracted JGC Corporation, clearly one of the leading firms in the LNG Construction sector in the world, to provide both the Pre-Front End Engineering Design Services and the main FEED for this first Floating LNG facility in Nigeria,” the UTM Offshore Chief Executive enthused.