Nigeria’s drive to harness its abundant natural gas resources has received a boost following the signing of a 15-year Gas Sale and Purchase Agreement (GSPA) between UTM Floating Liquefied Natural Gas (FLNG) Ltd and the NNPC/Seplat Energy Joint Venture.
The agreement, which provides for the supply of 200 million standard cubic feet of gas per day (mmscf/d), was signed yesterday at the ongoing NOG Energy Week Conference in Abuja.
The deal is expected to provide the required feed gas for the country’s first indigenous floating LNG project, positioning Nigeria to deepen gas utilisation, attract investment and strengthen its presence in the global LNG market.
At the signing ceremony, the managing director/chief executive officer of UTM Offshore Ltd and promoter shareholder of UTM FLNG Ltd, Mr Julius Rone, described the agreement as a landmark milestone that would accelerate the development of the project.
Rone commended President Bola Tinubu for supporting policies aimed at advancing gas development in Nigeria, saying the project aligns with the administration’s gas agenda and the country’s Decade of Gas initiative.
He also appreciated the support of the Nigerian National Petroleum Company Limited (NNPC Ltd), its leadership team, and Seplat Energy for their commitment towards making the agreement possible.
“This is a great joy for the country to see a Nigerian company moving ahead to develop Nigerian facilities in LNG, while also operating in line with international best practices,” he said.
According to him, the agreement provides the certainty required to advance financing, construction and operations of the UTM FLNG project, while assuring buyers of stable LNG supply and giving lenders confidence in the project’s long-term viability.
Rone said the future of Nigeria’s oil and gas industry remained bright, noting that government reforms and incentives had helped increase investor confidence in the sector.
“The support from government is what is required to attract investment, and that support is fully being given. We see stronger progress within the next five years as Nigeria works towards fully developing its gas resources by 2030,” he added.
Rone expressed optimism that the project would commence first gas production by 2030, describing it as a significant step towards unlocking Nigeria’s gas potential and driving economic prosperity.
Also speaking, the Group Chief Executive Officer of NNPC Ltd, Engr. Bayo Ojulari, said the agreement demonstrated the Federal Government’s commitment to increasing gas utilisation and achieving the objectives of the Decade of Gas vision.
Ojulari said the agreement would support national industrialisation, create employment opportunities, promote local content development, and position Nigeria as a competitive player in the global LNG market.
“Today’s signing is not just an agreement it is a declaration of intent to power Nigeria’s growth, prosperity, and energy future through gas,” he stated.
He added that the gas supply agreement provides a clear pathway towards achieving the Final Investment Decision (FID) for the UTM FLNG project in the fourth quarter of 2026.
The Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, said the agreement reflected the growing strength of local participation and private sector leadership in Nigeria’s gas industry.
He noted that investor confidence in Nigeria’s gas market was being strengthened by ongoing reforms, policy stability and fiscal incentives introduced by the government.
“The government will continue to prioritise infrastructure development, regulatory clarity and incentives to ensure that Nigeria realises its full potential as a gas-powered economy,” Ekpo said.
The UTM FLNG project, which commenced in 2021, will source feed gas from OML 104 (Yoho Field) offshore Akwa Ibom State. The gas will be processed and liquefied through the UTM FLNG vessel, which has a capacity of 1.8 million tonnes per annum (MTPA).
The project completed its Pre-Front End Engineering Design (Pre-FEED) in 2021, while Front End Engineering Design (FEED) was completed in October 2023 by JGC and Technip Energies, with KBR serving as Owner’s Engineer.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issued UTM FLNG a Licence to Construct (LTC) in 2024, while the Nigerian Content Development and Monitoring Board (NCDMB) approved the Nigerian Content Plan for the Engineering, Procurement and Construction phase of the project.
The project’s ownership structure includes NNPC Ltd with 20 per cent equity, UTM Offshore Ltd with 72 per cent, and the Delta State Government with 8 per cent.
