Source: Word Oil
Nigeria’s Midstream and Downstream Petroleum Regulatory Authority has issued a so-called license to build to the Abuja-based company for an LNG project estimated at 2.8 million metric tons per year. This marks a significant milestone and aligns with the government’s gas expansion ambitions, Farouk Ahmed, head of the regulatory agency, said on Friday. Nigeria, Africa’s largest crude producer, is seeking to wean itself off oil by promoting investment in the country’s 200 trillion cubic feet of proven gas reserves, which are largely untapped. Most of the country’s gas production is currently flared or reinjected into wells.
UTM was initially granted a licence to build a 1.2 MMtpa facility in 2019 but this was expanded to 2.8 million tonnes due to rising market demand for LNG, Ahmed said. Commissioning 2028 The plant, located in offshore Akwa Ibom state in the oil-rich Niger Delta, is expected to come online in 2028 with first gas produced a year later. It will produce LNG, petroleum gas and condensate. The company had signed a memorandum of understanding with the African Export-Import Bank in 2021 to raise up to $2 billion for the project, and the bank has received first-level approval to invest $350 million in the project, UTM CEO Julius Rone said. A final decision on the investment is expected in the final quarter of the year, he said.
The company also had contracts with Japan’s JGC Corp. and Houston-based KBR Inc. to design the project, and Vitol Group had a purchase agreement for LNG produced at the facility. Last year, the company signed a deal under which state-owned Nigerian National Petroleum Co. Ltd. took a 20% stake in the project.
UTM had proposed sourcing feedstock for the project from an offshore oil field operated by Exxon Mobil Corp. in partnership with NNPC, but that asset is in the process of being sold to Seplat, which has its own ambitions to develop its vast gas reserves. Rone said talks are moving forward to participate in the midstream arm of the project.
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