The Nigerian National Petroleum Company (NNPC) has announced a significant development in the construction of a new floating liquefied natural gas (LNG) plant in Nigeria. A heads-of-terms agreement has been signed with UTM Offshore, a local company, for the establishment of the plant, which will have a production capacity of 1.2 million metric tons of LNG annually. This project aims to reduce gas flaring, decrease carbon emissions, and generate thousands of job opportunities.
Under the terms of the agreement, the NNPC will provide the necessary gas feedstock for the plant. According to Julius Rone, the Chief Executive of UTM Offshore, the majority of LNG produced will be allocated for export purposes. However, around 300,000 metric tons will be reserved for domestic use when the project is anticipated to be completed by 2026.
Partnership with Technical Experts
UTM Offshore has already established agreements with three technical partners to commence the front-end engineering design phase of the LNG plant. These partners include KBR UK, Japan Gas Corporation, and Technip Energies. This initial phase will address any technical challenges and provide estimates on investment costs for the facility. UTM Offshore expects to complete this design phase by August.
Understanding Heads-of-Terms Agreement
The signing of a heads-of-terms agreement marks an essential step in outlining the roles and responsibilities of all parties involved before formal documents are drafted. It paves the way for detailed discussions and negotiations to ensure a smooth execution of the project.
Nigeria’s Untapped Gas Reserves
Nigeria boasts substantial untapped gas reserves, estimated at 202 trillion cubic feet. Currently, the country operates a six-train LNG plant in Bonny with a processing capacity of 22 million tons per year. The development of the new facility signifies Nigeria’s commitment to harnessing its natural resources and expanding its LNG industry.