The deal that is in two parts would see the continental bank
raising $2 billion to support the first phase with a commitment to fund the
second phase of the project by another $3 billion.
Signed by the Group Managing Director/CEO of UTM Offshore,
Mr. Julius Rone, and President and Chairman of Afreximbank, Dr. Benedict Okey
Oramah, the MoU paves the way for additional collaboration between the two
entities to support a future final investment decision (FID) on the project,
which UTM has been studying and conceptualising since 2020.
UTM Offshore Limited was granted a License to Establish
(LTE) by Nigeria’s former Department of Petroleum Resources (DPR) for the
installation of an FLNG unit on oil mining lease (OML) 104 in February 2021.
The block, which contains producing Yoho field, is operated
by the joint-venture of Mobil Producing Nigeria (operator, 40%) and the
state-owned Nigerian National Petroleum Corporation (NNPC, 60%).
Preparations for the project are now in full swing and
benefit from robust global and technical expertise. The pre-Front End
Engineering Design (Pre-FEED) contract was awarded to JGC Corporation of Japan
in May 2021 while KBR was appointed Owners Engineer. Global energy and
commodities trader, Vitol, has also joined the consortium as an off-taker for
the LNG.
“The UTM Offshore FLNG will be the first of such a project
developed by an African company on the continent,” Rone said, adding, “It will
also significantly contribute to the Nigerian government’s agenda of reducing
the flaring of associated gas across our industry.”
According to him, “As Africa’s FLNG industry grows, we are
well-positioned to offer attractive project economics by developing shallow
water gas reserves, while bringing significant environmental benefits to our
industry as a whole.”
The project involves the development and financing of a 1.2
million tonnes per annum FLNG facility with a capacity to process 176 MMscfd of
natural gas and condensate.
The project involves the development and financing of a 1.2
million tonnes per annum FLNG facility with a capacity to process 176 MMscfd of
natural gas and condensate.
The unit would target the processing of associated gas
currently flared in order to cut carbon emissions and monetise additional
reserves for the domestic and global markets.
Oramah, at the signing ceremony, commended Rone and his UTM
team for rising up to one of the greatest challenges of this era.
“Across the world, nations are evolving climate change
goals; Africa has not been able to leverage the abundant opportunities in the
continent to help meet the global climate change goals,” the bank’s chief said,
explaining, “That is why Afreximbank considers what UTM Offshore is doing, the
development of Nigeria’s first FLNG not just unique but laudable.”
He said the company was helping not just Nigeria but the
whole of Africa to transition to clean energy and in the process, the firm is
creating huge employment opportunities for Nigerians.
“This is a landmark project that Afreximbank takes very
seriously,” Oramah said.
Beyond financing, UTM’s FLNG project to the tune of
$5billion in two phases, the president of Afreximbank disclosed that the bank
would be ready to offer other financial and insurance support services to the
FLNG project.
He said if the project succeeds, it would create jobs and
aid development in Nigeria, and even more important, prove that Africa had
become serious about climate change goals and would further prove that
Nigerians can use the abundant potentials in Nigeria to develop Nigeria.
“Truth is that nobody will develop Nigeria but Nigerians.
UTM Offshore Limited, an indigenous company led by Mr. Julius Rone, has shown
that it has the capacity to help develop Nigeria. It is within the mandate of
Afreximbank to support what UTM is doing in Nigeria,” the Afreximbank president
said.
UTM Offshore Limited is pioneering the development of the
FLNG facility in collaboration with LNG Investment Management Services (LIMS),
a subsidiary of Nigeria National Petroleum Corporation (NNPC). The facility, a
newly built vessel, will receive gas feeds from the existing offshore platform
at OML 104, treat it to the required LNG standard, liquefy the gas, store the
LNG and offload to LNG carriers.
According to Rone, the floating LNG, when fully completed in
2026, shall have an LNG production capacity of 1.2 mmtpa, Turret and Mooring
System, Gas pre-treatment modules, LNG production modules, living quarters,
self-contained power generation and utilities as well as capacities for LNG
storage and offloading.
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