Construction Of Nigeria’s First Floating LNG Begins

Yemisi Izuora

UTM Offshore Limited, an indigenous company, has signed a landmark Preliminary Front End Engineering Design (Pre-FEED) Agreement with Japan Gas Corporation (JGC), a leading International Engineering Design, Procurement and Construction firm, for the establishment of  a Floating Liquefied Natural Gas (FLNG).

The agreement followed the issuance of license by Nigeria’s oil industry regulator, the Department of Petroleum Resources, DPR.

The FLNG when completed will be the first of its kind in Nigeria.

Under the arrangement, the  Pre-FEED scope shall be completed within four months from commencement date.

To facilitate timely execution of the project,   UTM has engaged Kellogg Brown and Root (KBR) UK to provide owner’s engineering Services on the project.

KBR was given the responsibility to provide due diligence on the JGC scope by conducting a third-party review of all deliverables from JGC during the Pre-FEED

Speaking at the Virtual signing event, the Managing Director of UTM Offshore Limited, Mr. Julius Rone said JGC Corporation came highly recommended, given the several similar projects the firm had undertaken across the world.

“What UTM is doing is largely novel. It is the first of its kind in Nigeria and we are very excited about this trail-blazing project; the opportunity to build from the scratch, the first Floating Liquefied Natural Gas Facility in Nigeria is humongous.

That is why we cannot afford to settle for less hence our resolve to contract JGC Corporation, one of the leading firms in the LNG Construction sector in the world, to provide the Pre-Front End Engineering Design Services for this first Floating LNG facility in Nigeria,” Mr. Rone Said.

The UTM Offshore Limited is pioneering the development of the FLNG facility in collaboration with LNG Investment Management Services (LIMS), a subsidiary of Nigeria National Petroleum Corporation (NNPC). The facility, a newly built vessel, will receive gas feedstock from an existing offshore facility, treat it to required LNG standard, liquefy the gas, store the LNG and offload to LNG carriers.

According to Mr. Julius Rone, the floating LNG, when fully completed shall have an LNG production capacity of 1.2 mmtpa, Turret and Mooring System, Gas pre-treatment modules, LNG production modules, living quarters, self-contained power generation and utilities as well as capacities for LNG storage and offloading.

At the landmark agreement signing event, Mr. Julius Rone applauded President Muhammadu Buhari for creating an enabling environment for indigenous firms, like UTM Offshore, to equitably operate in the very sensitive and competitive upstream sector of the petroleum industry.

He said that the resolve of UTM Offshore to embark on the huge project is steeped in the National Gas Policy of the Muhammadu Buhari administration.

“At UTM Offshore, we completely agree with Mr. President that given Nigeria’s potential of about 600 trillion cubic feet of gas, the commodity has the enormous potential to diversify our country’s economy. We also agree that the rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country.

“We thank the President for making gas development and utilization a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investments, and provide the much-needed jobs for our citizens in the country,” Mr. Rone said.

Aso, the Chief Executive Officer of UTM Offshore Limited commended the Minister of State for Petroleum Resources, Chief Timipre Sylva “for tenaciously driving Mr. President’s vision in the Petroleum sector, particularly the gas policy”

He expressed gratitude to a number of key players in the nations petroleum industry, notably the Group Managing Director of Nigeria National Petroleum Corporation (NNPC) Mallam Mele Kyari and the Director of Nigeria’s Department of Petroleum Resources (DPR), Mr. Sarki Auwalu for their support for the FLNG project.

“Today’s event would never have been possible but for the first class management team at Nigeria’s Department of Petroleum Resources. DPR has most professionally been guiding us on this project. In fact, DPR reserves the right to claim huge chunk of the success story of this first Floating Liquefied Natural.

” I am particularly happy to assert that UTM Offshore has, so far, not disappointed DPR since it issued us the all-important license to embark on this novel but noble project. With God helping us we are very poised to make our great nation and our people proud by successfully commissioning this first FLNG facility in record time. So, we truly can not thank DPR enough. We shall continue to partner with DPR and work under its careful guidance,” Rone averred.

“We equally owe a debt of gratitude to the Nigerian Content Development and Monitoring Board (NCDMB) for ensuring that an indigenous firm like UTM is given the opportunity to operate at the highest level in the upstream sector of Nigeria’s petroleum industry. We will justify the confidence the NCDMB has reposed in us.”.

The Director and Chief Executive Officer of DPR, Mr. Sarki Auwalu, in his comments lauded Mr. Julius Rone and his team at UTM Offshore for blazing the trail in building Nigeria first Floating LNG.

“It is a historic event today as UTM Offshore working with our support is actualizing Mr. President vision not just for gas and the diversification of our economy. Mr. President has promised to migrate Nigeria to gas and that is what UTM Offshore is doing with the decision to build and operate and FLNG.

It is a tortious process but I can confirm that UTM Offshore has met all the requirements and that is why DPR gave the firm license to proceed with the building of the FLNG. At DPR we have been monitoring closely what UTM is doing and we are very happy that they are working with the best firms and consultants in the world, in fact, first class and globally renowned firms are working with UTM Offshore to actualize this FLNG. DPR shall continue to guide and encourage UTM on this project,” Mr. Auwalu said.

At the event an Executive of JGC Corporation of Japan, Mr. Koji Sakrai praised the vision and tenacity of Mr. Julius Rone and his firm, UTM Offshore Limited, and pledged the commitment of JGC Corporation to deploy latest and cost-effective engineering design and constructions modules in undertaking the pre-FEED for UTM’s floating LNG and assured that the task would be completed within schedule.

Present at the agreement signing were the representatives of the GMD of NNPC, Abubakar Umar, representatives of of Vitol, Mr. Chibuzor Ifeanyi while Mr. Steve Brown also of Vitol joined virtually. Mr. Ibrahim Sagna, Executive Director, Afrexim bank joined virtually while Mr Peter Olowononi and Mrs Ngozi Kalu-Mba, also from the bank attended the event. Mr. Paul Nma, the Special Adviser on Investments to the Delta State Governor represented the Governor while Dr. Yahuza Kassim, who made a detailed presentation on the FLNG project represented Yahuza Energy Services.

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