Nigerian energy company UTM Offshore has signed a long-term gas supply agreement for its planned floating liquefied natural gas (FLNG) facility, marking a major milestone for the company’s estimated $3 billion project and bringing it closer to a final investment decision.
The agreement secures feed gas for the offshore facility, addressing one of the most critical requirements for the development of the FLNG project, which is expected to process natural gas from the Yoho field, located offshore in Nigeria’s oil-rich Niger Delta.
UTM Offshore said the gas supply arrangement strengthens the commercial viability of the project and reinforces investor confidence as the company advances financing discussions and prepares for construction.
The floating LNG facility is designed to produce approximately 2.8 million tonnes of liquefied natural gas annually, alongside liquefied petroleum gas (LPG) and condensates for both domestic consumption and export markets.
The project forms part of Nigeria’s broader strategy to monetize its vast natural gas reserves, diversify export earnings and support the government’s “Decade of Gas” initiative, which aims to increase gas utilization for industrial development, power generation and cleaner energy.
UTM has already secured key engineering and technology partnerships for the project, while discussions with international lenders and strategic investors are continuing ahead of a final investment decision.
Analysts say securing a reliable gas supply significantly reduces project risk and represents one of the final major commercial hurdles before construction can begin.
Once completed, the FLNG facility is expected to create thousands of direct and indirect jobs, boost Nigeria’s LNG export capacity and strengthen the country’s position as one of Africa’s leading producers of liquefied natural gas.
The project is expected to commence operations later this decade, subject to financing, regulatory approvals and completion of construction.
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