Nigeria secures gas deal for $3bn LNG project

Nigeria moved a step closer to expanding its liquefied natural gas (LNG) industry after UTM Offshore secured a 15-year gas supply agreement, removing one of the last hurdles to its proposed $3 billion floating liquefied natural gas (FLNG) project. The deal gives the company the certainty it needs to move forward towards a final investment decision expected in Q4 2026.”

Under the deal, a joint venture between the Nigerian National Petroleum Company (NNPC) The project will be supplied with 200 million standard cubic feet of natural gas per day by a joint venture between the Nigerian National Petroleum Company (NNPC) Limited and Seplat Energy Producing Nigeria Unlimited. The gas will be supplied by the Yoho field and will support the production of around 1.8 million tonnes of LNG per year once the facility is operational.

Julius Rone, the Chief Executive Officer of UTM Offshore, said at the signing ceremony in Abuja that the agreement was a breakthrough. The long-term supply deal would improve investor confidence, facilitate access to project finance and provide confidence to potential LNG buyers before construction, he said.

The floating LNG project, licensed in 2024, is part of Nigeria’s wider strategy to commercialise stranded gas reserves and increase LNG exports. The project is jointly owned by UTM Offshore with a 72 per cent stake, NNPC Limited with 20 per cent, and the Delta State Government with the remaining eight per cent.

Nigeria has one of the largest natural gas reserves in Africa, but decades of poor infrastructure, lack of funding and regulatory uncertainty have hindered efforts to fully exploit the resource. The project is now a step closer to becoming one of Nigeria’s largest future gas export facilities, with the front-end engineering now complete and the gas supply secured.

Source: Reuters