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This strategic investment aims to augment energy security by
reducing gas prices, fortifying foreign exchange earnings, generating
employment opportunities, and propelling GDP growth for Africa’s fourth-largest
economy.
“This development propels us further towards achieving our
full potential in the gas-centric decade. The facility will augment foreign
exchange inflows into the nation, thereby increasing supply and bolstering the
naira. The production of liquefied petroleum gas (LPG) will promote the
adoption of clean cooking practices and reduce our reliance on foreign exchange
for LPG imports,” Oreoluwa Owolabi, partner at Mach Advisory, said.
“I anticipate that its achievement will have an impact on
increased investments in gas utilization, a critical factor in ensuring the
success of the Presidential CNG initiative and reducing Nigeria's carbon
footprint from transportation.”
Julius Rone, the Managing Director and Chief
Executive Officer of UTM FLNG, has provided assurances that the company has
meticulously established all requisite processes to guarantee a seamless
commencement of operations and achieve the targeted production capacity of 2.8
million metric tons per annum by the fourth quarter of 2028.
“Our Company is set for FID before the end of this year, and
on completion, in Q4 2028, it will have a production capacity of 2.8 million
metric tonnes of natural gas, 450 metric tonnes of LPG, and other liquids per
annum for export and domestic consumption.”
Rone emphasized that this advancement represents a
significant milestone that will propel the economy forward by ensuring
affordable gas supply for households, vehicles, and industries. Additionally,
it is expected to create numerous job opportunities and lucrative business
prospects for Nigerians.
The project will greatly enhance energy security by
diversifying Nigeria's energy sources and expanding the use of natural gas,
thereby decreasing the country's dependence on oil, minimizing supply
interruptions, and improving energy reliability.
Furthermore, this development will help shield against the
fluctuating prices of crude oil, which is essential given the rising volatility
in global energy markets and the increasing demand for sustainable energy
alternatives.
Natural gas resources are a critical catalyst for Nigeria’s
economic growth and development. With approximately 209 trillion cubic feet
(TCF) of proven natural gas reserves, Nigeria ranks ninth globally. The
successful execution of the FLNG project is expected to generate significant
export revenue, leveraging Nigeria’s abundant natural gas reserves.
The global demand for liquefied natural gas (LNG) is
projected to increase significantly, presenting Nigeria with an opportunity to
capitalize on this growing market and diversify its revenue streams. As
highlighted in the Shell LNG Outlook 2024, the demand for LNG is anticipated to
rise by over 50% by 2040, driven by factors such as the transition from coal to
gas in China and the increasing reliance on LNG to support economic growth in
South and Southeast Asian countries.”
Government and Financial Institutions: Catalysts for
Financing Renewable Energy Development in Africa
The oil giant reported a rise in global LNG trade from 397
million tonnes in 2022 to 404 million tonnes in 2023, with limited LNG supplies
hindering growth. This presents a significant opportunity for Africa’s
fourth-largest economy, as increased export earnings can contribute to a more
robust trade balance and enhance the nation’s financial standing on the global
stage.
The economic Impact of the FLNG project is significant,
particularly in terms of GDP growth. It is anticipated that the project will
generate a substantial number of jobs across diverse sectors, encompassing
construction, engineering, operations, and logistics. Furthermore, the influx
of investment and the enhancement of energy infrastructure will serve as
catalysts for economic activities and promote industrial development.
Ayodele Oni, a partner specializing in energy at Bloomfield
Law Practice, emphasized that the establishment of the UTM FLNG facility
presents a significant opportunity for Nigeria and its people.
According to Oni, the FLNG facility will streamline
Nigeria's capacity to export liquefied natural gas without the necessity of
extensive onshore infrastructure. This streamlined export process is expected
to enhance Nigeria's foreign earnings, thereby contributing to the growth of
the economy, trade, and payment balance.
Ayodele Oni emphasized the importance of implementing
thorough environmental and safety protocols to avoid oil spills or leaks, as
well as having efficient remediation strategies in place in case of any
incidents. Additionally, Oni highlighted the significance of carefully planning
the logistics of transportation networks and ports to guarantee the success of
the UTM FLNG facility project.
Joshua Olorunmaiye, a legal advisor specializing in energy,
natural resources, projects, and infrastructure at Banwo & Ighodalo, sees
the UTM FLNG as a major milestone for the industry. This project is vital due
to the pressing need for substantial infrastructural development, especially
concerning gas development.
Olorunmaiye stated that Nigeria's abundant natural gas
reserves are already known. Nevertheless, the issue at hand is how to
effectively develop and utilize this vast resource for the benefit of the
nation. He views it as a significant opportunity that will impact various areas
including domestic gas availability, technology transfer, local content and
capacity development, as well as Nigeria's commitment to clean energy.
FLNGs provide rapid, economically appealing, and
ecologically sound methods for capitalizing on offshore gas fields and their
associated gas reserves.
Olorunmaiye mentioned that typical technical challenges like
offloading, modularization, operability, and safety are to be anticipated. He
emphasized that addressing these challenges effectively requires deploying
top-notch technology and equipment, along with personnel who are attentive to
the varying dynamic circumstances that may arise.
The inaugural meeting of the board of directors for Nigeria's First Floating Liquefied Natural Gas (FLNG) project was recently held. The board includes representatives from the Nigerian National Petroleum Company Limited (NNPC), led by its Executive Vice President, Gas, Power and New Energy, Mr. Olalekan Ogunleye.
Also present at the meeting were the General Manager, Gas Development, NNPC, Dr. Salihu Jamari, and the Permanent Secretary Ministry of Finance, Mr. Gibson Pinnick, representing the Delta State Government.
Other board members include the Managing Director of UTM FLNG, Dr. Julius Rone; Chief Akin Ricketts; Ms. Doyin Adelabu; and Sadeeq Mai-Bornu, who served as the Protem Chairman of the meeting.