Nigeria’s UTM Offshore Ltd. has received approval to build the country’s first floating liquefied natural gas (FLNG) facility. The Nigerian Midstream and Downstream Petroleum Regulatory Authority granted the company a license to construct the LNG plant, which is estimated to produce 2.8 million metric tons per year. This project is a significant milestone in Nigeria’s push to capitalize on its 200 trillion cubic feet of largely untapped gas reserves.
“This aligns with the government’s gas expansion ambitions,” said Farouk Ahmed, head of the regulatory authority. The project, initially approved in 2019 for a smaller facility, was expanded due to rising LNG demand.
Set to be located offshore in Akwa Ibom state in the Niger Delta, the plant is expected to be commissioned in 2028, with production starting a year later. It will produce liquefied natural gas, petroleum gas, and condensate. UTM has partnered with international companies like Japan’s JGC Corp., Houston-based KBR Inc., and Vitol Group for design and off-take agreements.
To finance the project, UTM signed a memorandum of understanding with the African Export-Import Bank to raise up to $2 billion, with the bank committing $350 million. A final investment decision is expected by the end of this year.
The facility will use feedstock from offshore oil fields operated by Exxon Mobil, though the assets are currently being sold to Seplat. UTM CEO Julius Rone expressed optimism about Seplat’s participation in the project, which could further enhance its gas portfolio.
This development is a major step in Nigeria’s broader strategy to reduce reliance on crude oil and monetize its vast gas resources, a key part of the nation’s energy future.