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Nigeria to build its first FLNG unit

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Nigeria to build its first FLNG unit

Nigerian company UTM Offshore has signed a front-end engineering design (FEED) contract for the development of an FLNG facility in Nigeria with JGC Corporation, Technip Energies and KBR.

It will be Nigeria's first floating liquefied natural gas (FLNG) facility. Africa currently has two FLNG units in operation, the Hili Episeyo  in Cameroon and, recently, the Coral Sul FLNG in Mozambique. In Nigeria, the FLNG unit will be used for the development of the offshore block OML 204.

According to the head Timipre SylvaAccording to the Nigerian Minister of Petroleum Resources, the FLNG will help Nigeria maximise the exploitation of stranded gas resources in a sustainable manner while contributing to the Nigerian government's programme to reduce flaring and optimise environmental sustainability in energy developments.

According to the minister, Nigeria's gas industry is hampered by a lack of investment, transportation and export infrastructure, and technological challenges. The minister said the FLNG project was a step in the right direction for the West African country to develop, exploit and monetise its more than 209 trillion cubic feet (tcf) of proven gas resources and a potential upside of 600 tcf of gas to ensure energy security, economic growth and emission reduction.

"Given the significant resources that can be developed and used for commercial purposes, we have already proclaimed that gas is our transition fuel and a destination fuel and we expect it to be a major component of our energy mix by 2060," said Minister Sylva, adding that "as a developing country, we believe that affordable, accessible and reliable energy will continue to be essential to sustain and power our growing economy and lift millions of people out of poverty. As a government, we know "Our action is essential to enable the evolution of the energy system. We believe that innovation, technology and policy will be the key drivers of change."

Highlighting the role of FLNG technology in accelerating gas development, the minister added: "We are aware that the number of offshore gas discoveries has increased in recent years around the world, with LNG and FLNG becoming even more important in meeting the world's future. According to market research analysts, the FLNG market is expected to grow at a compound annual growth rate (CAGR) of 27.14%, reaching $88.99 billion by 2024. The UTM offshore FLNG project is therefore timely and will lead to a more rapidly evolving, diversified and flexible global LNG industry.
 
The Minister also stressed the importance of collaborative partnerships, praising the "African Export-Import Bank, under the leadership of its President and Chairman, Dr Benedict Okey Oramahfor orchestrating the signing of the Memorandum of Understanding (MoU) with UTM Offshore Limited to raise 5 billion for the development of Nigeria's first FLNG project.

Julius Dediare Rone CEO and president of UTM Offshore, said: "We chose FLNG because FLNG was originally developed to help realise the promise of natural gas - in particular, to bring gas to the global market from small offshore fields and onshore terminals in areas lacking infrastructure - in particular pipelines. "

"And the LNG market is stuck with traditional models that do not meet the global demand for flexible, low-cost LNG to become the fuel of choice over coal and liquids. Global markets as we all know them today need low cost, flexible LNG supply and have limited capacity to support large conventional projects. 

"The solution, says UTM Offshore, is a standardised FLNG that allows costs to be 20-40% cheaper with FID thresholds of only 1.5-2.5 MTPA. And this is where the UTM FLNG offshore project will prevail, having the desired impact as well as influence.

Commenting on the trends in the African gas and FLNG market, NJ Ayuk, Executive Chairman of the African Energy Chamber, said: "Gas is green for Africa and crucial for driving socio-economic development and eradicating energy poverty on the continent. The Chamber commends the work undertaken by UTM Offshore and its development and investment partners, such as Afreximbank. 

"At the African Energy Week, we took a strong stance to boost African gas deals and this is one of them that we support. We believe that African solutions and companies will be crucial to unlocking the full potential of the continent's huge gas resources to ensure energy security and boost industrialisation.

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