UTM FLNG To Improve Local LPG Sourcing In Nigeria.

By Oluwabukola Jimoh ــ Last Update 22 July 2023

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UTM FLNG, a Nigerian gas company, is embarking on an ambitious project to establish the first Floating Liquefied Natural Gas (FLNG) facility in Nigeria, marking a significant milestone as the first facility of its kind developed by an indigenous private African company. The primary goal of this venture is to address the high cost of fuel in the country and boost gas production for domestic, automotive, and industrial use, all while contributing to the national economy.

The FLNG facility is set to produce an annual output of 1.5 million tonnes of Liquefied Natural Gas (LNG) for export and an additional 300,000 LPG metric tonnes for the domestic market. This move is aimed at reducing and stabilizing gas prices in the country, generating thousands of job opportunities, and opening up avenues for investment in Nigeria.

Dr. Julius Rone, the Group Managing Director of UTM FLNG, expressed his enthusiasm for the project after a crucial meeting with President Bola Ahmed Tinubu at the Presidential Villa in Abuja. He highlighted the facility's potential to become a legacy project under the Tinubu administration, contributing to economic revitalization and environmental preservation.

The FLNG facility will be anchored offshore in Akwa Ibom State at a depth of approximately 60 meters. UTM FLNG is committed to aligning its efforts with the Renewed Hope agenda, aiming to leverage Nigeria's abundant gas resources to drive socio-economic development sustainably.

Upon its completion in Q4 2026, the facility is expected to have a profound impact on the Nigerian energy landscape. With 300,000 metric tonnes of LPG production dedicated to the domestic market, representing 25% of the national demand, it will significantly stabilize the price of cooking gas and find applications in auto gas and various industrial uses.

Moreover, the project will create around 3,000 direct jobs and 4,000 indirect jobs, fostering value creation along the LPG supply chain. Additionally, the adoption of LPG will combat deforestation and reduce the mortality rate caused by smoke inhalation from firewood usage. The facility's contribution to eliminating flaring of associated gas will align with Nigeria's climate change goals.

UTM FLNG Limited, a subsidiary of UTM Offshore Ltd, is spearheading this significant initiative. Financing for the project is facilitated by Afreximbank, with financial closure expected in Q4 2023. UTM FLNG remains steadfast in its commitment to partnering with the Federal Government to realize its vision of providing clean, affordable, and abundant energy for all Nigerians.

How does the UTM FLNG affect the Nigeria LPG market?

It is going to significantly increase our local sourcing of LPG by over 50% as less than 50% of LPG consumed in Nigeria comes from local and over 50% is imported. This means lower cost of LPG in the market which is good for market growth. The location of the FLNG offshore means, an LPG vessel will be required to deliver LPG to local depots in Nigeria. However, the LPG trade, though offshore, will be treated as a local transaction, just like the NLNG.

Picture Source: The Guardian 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.