FG Creates New Opportunities Amid Economic Challenges With LTC Approval For UTM FLNG

By Oluwabukola Jimoh ــ Last Update 15 September 2024

Amidst Nigeria's ongoing economic challenges, the federal government, under the leadership of President Bola Tinubu, has opened a new pathway to economic growth with the granting of a Licence-to-Construct (LTC) to UTM FLNG Limited. This approval, given over the weekend, allows the construction of Nigeria's first Floating Liquefied Natural Gas (FLNG) facility—a major development in the nation’s energy sector.

The UTM FLNG project is a significant milestone, enabling Nigeria to tap into its vast natural gas reserves, estimated at 209 trillion cubic feet. The facility will enhance both export opportunities and domestic consumption, paving the way for economic growth, job creation, and new business opportunities. By unlocking access to lower-cost gas, the project is expected to catalyze broad economic benefits for Nigerians and foreign partners alike.

A Game-Changer in Nigeria's Gas Sector

The UTM FLNG plant is set to produce 2.8 Million Tons Per Annum (MTPA) of Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG), and condensate from re-injected gas at the Oil Mining Licence (OML) 104 Yoho Field. This development will not only provide a steady stream of gas but also address issues like gas flaring, thereby reducing environmental harm and supporting efforts to combat deforestation.

Speaking on the milestone, Dr. Julius Rone, Group Managing Director of UTM FLNG Limited, expressed his gratitude to President Tinubu for his "unwavering support to the gas sector and the UTM FLNG project." He emphasized that this project aligns perfectly with the president’s vision to develop Nigeria’s gas resources as a sustainable energy source and a driver of economic development.

Rone also highlighted the broader economic impact of the project, which is expected to create around 7,000 jobs and boost value creation across the LPG supply chain.

Fulfilling a National Vision

The issuance of the LTC to UTM FLNG by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) marks the fulfillment of President Tinubu's July 2023 commitment to support this groundbreaking project. The collaboration between UTM FLNG, the NMDPRA, and other key stakeholders has been instrumental in navigating the complexities of the project.

Rone expressed his appreciation for the support from the Nigerian National Petroleum Company (NNPC), particularly its Group Chief Executive Officer, Mallam Mele Kyari, and the role of the Delta State Government in moving the project forward. The Head of Terms (HoT) agreement signed in July 2023 and the finalized shareholders' agreement in December 2023 further solidified this partnership.

A Milestone for Nigeria’s Gas Expansion Ambitions

The LTC signing ceremony, held at NMDPRA headquarters in Abuja, was attended by industry leaders, including the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, and NMDPRA CEO, Farouk Ahmed. They acknowledged the significant progress the project represents for Nigeria’s gas expansion efforts, in line with the Petroleum Industry Act (PIA) of 2021.

As Nigeria continues its push to become a global leader in the energy sector, the UTM FLNG project is expected to play a pivotal role. With the facility set to be located offshore Akwa Ibom State in the Niger Delta, its completion is anticipated in 2028, with gas production projected to commence the following year.

Source: This Day News.

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Oluwabukola Jimoh

Oluwabukola Jimoh is a dynamic academic writer and captivating energy blogger. She is able to delve into intricate subjects with an insatiable thirst for knowledge, crafting thought-provoking essays that engage and enlighten her readers.