The Nigerian Midstream and Downstream Petroleum Regulatory Authority issued the license-to-construct to the company for an LNG project estimated to produce 2.8 million metric tons per year.
Speaking at the event, the Authority Chief Executive, Farouk Ahmed, said: “This marks a significant milestone and aligns with the gas expansion ambitions of the government.”
The project is in line with the nation’s aspiration to tap its 206 trillion cubic feet of proven gas reserves; most of which are currently either flared or re-injected into wells.
Ahmed said UTM was initially granted a license to build 1.2 million tons per annum facility in 2019, but it was upgraded to 2.8 million tons “because of increased LNG demand in the market.
The plant, located in offshore Akwa Ibom state in the oil-rich Niger Delta, is expected to be inaugurated in 2028, with first-gas a year later. It will produce LNG, petroleum gas and condensate.
Similarly, UTM Chief Executive Officer, Julius Rone, the company had already signed a memorandum of understanding with the African Export-Import Bank in 2021 to raise as much as $2 billion for the project, and the bank has received a first-level approval to invest $350 million in the project.
He said the company had also concluded contracts with Japan’s JGC Corp. and Houston-based KBR Inc. to design the project, with Vitol Group having an off-take agreement for LNG produced at the facility.
Also, last year, the company signed a deal that saw state-owned Nigerian National Petroleum Co. Ltd. take a 20% stake in the project.
Rone, said: “It is a stranded gas that can only be monetized through a floating LNG technology. It will only add to Seplat’s balance sheet to say they have a ready-made buyer for a gas they have not developed.”
(Vanguard)
