Delta State Government, Nigerian National Petroleum Company Limited and the UTM Offshore Ltd, Tuesday, signed a Shareholders Agreement for the development of first Floating Liquefied Natural Gas, FLNG in Nigeria.
Secretary to the State Government, Dr Kingsley Emu and Solicitor General and Permanent Secretary Ministry of Justice, Mr Omamuzo Erebe signed for the Delta State Government, while the Group Chief Executive Officer, Mr. Mele Kyari and Group Managing Director Julius Rone signed for NNPC Limited and UTM Offshore, respectively.
With the agreement Delta State Government will own eight percent share of the project, NNPC Limited 20 percent and UTM Offshore 72 percent.
Speaking at the signing ceremony at the NNPC Towers Abuja, Governor Sheriff Oborevwori of Delta State, said the UTM FLNG Project was the first of its kind to be developed by an indigenous private company in Nigeria.
Governor Oborevwori explained that the state government took 8% equity in the floating LNG project because of its conviction of the strategic importance of the project to the national economy, adding that with 40% of Nigeria’s proven gas reserves in Delta State, it was a worthy investment.
According to him, the deal marked a significant milestone in the development of the project, expressing hope that construction will begin next year.
He said: “Of particular interest to Delta State Government is the dividend that this UTM FLNG will generate, thus advancing the socio-economic development of our great state. It is expected that over 300,000 metric tonnes of LPG (cooking gas) will be produced and dedicated to the domestic market.
“This project will also help to mitigate the environmental hazards in the Niger Delta by reducing gas flaring. Of course, our women folk will also benefit from the fuel switch from kerosene and firewood to cleaner energy, thus improving their health and general wellbeing.
“Another benefit we envisage with this project is that it will create job opportunities for our youths, which is one of the four pillars of our MORE agenda”.
While commending the immediate the immediate past Governor, Senator Ifeanyi Okowa for his foresight in investing in the venture, he commended other stakeholders “like regulators and Afreximbank for helping to arrange financing and, of course, the dedicated staff of Delta State Investment and Development Agency (DIDA) for their resourcefulness”.
In his remarks, the Group Chief Executive Officer, NNPC, Mr Mele Kyari commended the Delta State Governor for not just being a promoter of gas development in the country but for also investing in gas projects.
“We are happy to collaborate with the Delta State Government in this venture. The State Government is here in two capacities, one as a supporter of growing gas utilization in the country and also now as an investor in this necessary industry but potentially a valuable industry for all of us”, he added.
Also speaking, the Minister of State Petroleum Resources (Gas), Hon. Ekprikpe Ekpo noted that it was time for the country to begin the monetization of its huge gas reserves for the development of the economy.
In his remarks, Group Managing Director of UTM, Mr. Julius Rone said the signing ceremony marks another significant milestone in actualizing Nigeria’s first indigenous FLNG.
Mr. Rone said he expects the Final Investment Decision (FID) on the project to be taken before the end of the first quarter of 2024. He commended the stakeholders for their support, especially the Delta State Government for investing in the project.
“I want to thank the Delta State Government for taking an equity on this laudable project which will create other sources of revenue for the state to develop their infrastructure that is highly needed and create employment for the teeming youths of Delta State”, Rone said.
