UTM Offshore Limited has secured a 15-year gas supply agreement for its proposed $3 billion Floating Liquefied Natural Gas (FLNG) project, marking a major breakthrough in Nigeria’s efforts to commercialise its vast offshore gas resources. The deal ensures a steady feed gas supply of 200 million standard cubic feet per day from the Yoho field, sourced through a joint venture between NNPC Exploration and Production Limited (NEPL) and Seplat Energy Producing Nigeria Unlimited (SEPNU). This agreement removes a key barrier to financing and investor confidence, paving the way for the project’s final investment decision expected in the fourth quarter of 2026.
The FLNG facility, once operational, is designed to produce approximately 1.8 million metric tonnes of liquefied natural gas annually. It will be the first floating LNG export facility licensed in Nigeria, granted in 2024 as part of the government’s broader strategy to unlock stranded gas reserves and diversify export earnings. The project is structured as a joint venture, with UTM Offshore holding a 72 percent stake, NNPC owning 20 percent, and the Delta State Government retaining the remaining 8 percent.
At the signing ceremony in Abuja, UTM Offshore Chairman and CEO Julius Rone described the agreement as a critical milestone. He emphasized that the long-term gas supply provides essential certainty for investors, lenders, and potential LNG buyers. This clarity is expected to accelerate the project’s progression toward construction, following the completion of Front-End Engineering and Design (FEED) by JGC Corporation and Technip Energies.
Nigeria holds one of Africa’s largest proven natural gas reserves, estimated at over 200 trillion cubic feet. However, much of this resource remains untapped due to infrastructure gaps, funding challenges, and regulatory hurdles. The UTM FLNG project is seen as a transformative solution to these issues, offering a flexible and cost-effective way to monetize offshore gas without the need for extensive onshore infrastructure.
By advancing this project, Nigeria aims to strengthen its position in the global LNG market and support its energy transition goals. The development will not only boost export capacity but also create jobs and stimulate economic growth in the Niger Delta region. With engineering work already at an advanced stage, the project is poised to become one of Nigeria’s most significant gas developments in recent years.
If the final investment decision is approved as planned, the UTM FLNG project will represent a major step forward in Nigeria’s energy sector transformation, setting a precedent for future offshore gas ventures.
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