Nigeria's UTM Offshore said on Tuesday it had secured a 15-year gas supply agreement, removing a major obstacle to a final investment decision on its $3 billion floating liquefied natural gas (FLNG) project, now expected in the fourth quarter after delays.
Under the agreement, a joint venture between Nigeria's state-owned NNPC Ltd and independent Seplat Energy Producing Nigeria Unlimited will supply 200 million standard cubic feet (5.7 million cubic metres) of gas per day to the UTM FLNG project, designed to produce 1.8 million tonnes of LNG per year from gas sourced from the Yoho field.
"The execution of this agreement establishes the long-term feed gas framework needed to advance project financing, construction and operations," UTM Offshore Chief Executive Julius Rone said at the signing ceremony in Abuja.
Rone said the agreement would provide certainty for investors, lenders and LNG buyers and position the project for a final investment decision in the fourth quarter of 2026.
The project, in which NNPC holds a 20% stake, UTM Offshore 72% and Delta state government 8%, received Nigeria's first licence for a floating LNG export facility in 2024 as the government seeks to monetise large volumes of stranded gas reserves and expand LNG exports.
Nigeria holds some of Africa's largest gas reserves but has struggled for decades to convert much of the resource into commercial exports and domestic industrial use because of funding constraints, infrastructure gaps and regulatory uncertainty.
Front-end engineering and design of the project was completed in 2023 by JGC and Technip Energies, according to UTM.
(Reuters - Reporting by Isaac Anyaogu, editing by Andrei Khalip)
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