The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) handed over a license to construct (LTC) to UTM during a ceremony in Abuja on Friday.
The FLNG facility is expected to have up to 2.8 million metric tonnes per annum (mtpa) of capacity, including up to 0.5 mtpa of LPG which will be dedicated to the domestic market.
Rone told LNG Prime on Sunday the LTC awarded by NMDPRA means UTM “can start construction of the project.”
This is one of the conditions needed for UTM to take FID, he said.
FLNG expected to arrive in Nigeria in 2028
Rone told journalists after the ceremony in Abuja that the sail away of the FLNG from the shipyard is expected to take place in 2028.
After that, the FLNG is expected to arrive in Nigeria and start the commissioning phase during the same year.
He said UTM expects to achieve first gas from the project in the first quarter of 2029.
Asked about the price tag of the project, he said “the costs are still being worked out.”
“This is just the engineering phase, and there are other variables. So it is not possible to give you the cost, but it is a multibillion dollar project,” he said.
In 2021, UTM joined forces last with the African Export-Import Bank (Afreximbank) to secure up to $5 billion for the development of Nigeria’s first floating LNG production unit, including about $2 billion for the project’s first phase.
Following this memorandum, UTM and Afreximbank signed a project preparation facility in June 2023 to progress the project.
Capacity boost
UTM boosted the project’s capacity as the company previously expected the FLNG to have a capacity of 1.5 mtpa, while the company also aims to install a second FLNG offshore Nigeria.
Rone previously said that this capacity boost is the result of the front-end engineering and design (FEED) work completed by France’s Technip Energies and Japan’s JGC.
UTM awarded the FEED contract to the two firms in November 2022. The firm also selected US-based KBR as the owner’s engineer.
Under the FEED, Technip Energies worked on the hull and the mooring system design, while JGC worked on the topsides design.
Cosco yard
Following the EPCIC contract award, Technip Energies and JGC will subcontract a shipbuilder in China to build the hull and integrate topsides.
Shipbuilding sources previously told LNG Prime that China Merchants Heavy Industry and Cosco Shipping (Qidong) Offshore were competing to win the contract.
Rone confirmed to LNG Prime on Sunday that Cosco Shipping (Qidong) Offshore has been selected to work on the FLNG.
Last year, French LNG containment firm GTT signed a technical assistance and license agreement with the unit of Cosco Shipping.
This new agreement enables the yard to construct GTT’s technologies for offshore LNG units, such as FLNGs or FSRUs, as well as for LNG carriers, according to GTT.
GSPA with NNPC/Seplat JV
The FLNG will process associated gas from the Yoho field currently flared in order to cut carbon emissions and monetize additional reserves for the domestic and global market.
Yoho field lies in Oil Mining Lease (OML) 104, offshore Nigeria.
State-owned Nigerian National Petroleum Company (NNPC) holds a 60 percent stake and ExxonMobil’s unit MPN previously held a 40 percent interest in the joint venture.
Seplat Energy, listed on both the London and Nigerian stock exchanges, now owns the 40 percent stake after it bought MPL from ExxonMobil.
Rone said the next step for the FLNG project would be signing a gas sale and purchase agreement (GSPA) with the joint venture consisting of NNPC and Seplat Energy.
After that, UTM plans to take FID on the project, possibly be the end of this year, and also sign the EPCIC deal with Technip Energies and JGC, he said.
Partners
As per the project’s partners, Rone said in March UTM has requested the Nigerian Content Development and Monitoring Board (NCDMB) to invest in the project and to accelerate key approvals that would fast-track the project’s development.
With an equity investment, NCDMB would join NNPC and the Delta State government as a partner in UTM’s FLNG project.
In December last year, UTM signed a shareholders agreement (SHA) for the FLNG project with NNPC and the Delta State government.
Under the deal, UTM holds 78 percent equity of the FLNG project, NNPC owns 20 percent, and the Delta State government owns 8 percent.
