On Tuesday, the Delta State Government, Nigerian National Petroleum Company Limited (NNPCL), and UTM Offshore Limited formalized a shareholders agreement for the development of Nigeria’s inaugural Floating Liquefied Natural Gas (FLNG) project.
As per a statement from the Delta State Ministry of Information, obtained by journalists in Warri on Wednesday, the signing was officiated by Dr. Kingsley Emu, the Secretary to the State Government, and Mr. Omamuzo Erebe, the Solicitor General and Permanent Secretary of the Ministry of Justice, representing the Delta State Government. On behalf of NNPCL and UTM Offshore, Mr. Mele Kyari, Group Chief Executive Officer, and Mr. Julius Rone, Group Managing Director respectively, signed the agreement.
Under this arrangement, the Delta State government secures an eight percent stake in the project, while NNPCL and UTM Offshore hold 20 percent and 72 percent respectively.
Speaking at the signing ceremony at the NNPC Towers in Abuja, Delta State Governor, Sheriff Oborevwori, noted that “the UTM FLNG Project was the first of its kind to be developed by an indigenous private company in Nigeria”.
Oborevwori explained that “the state government took 8% equity in the floating LNG project because of its conviction of the strategic importance of the project to the national economy”.
He added that with 40% of Nigeria’s proven gas reserves in Delta, it was a worthy investment.
According to the governor, the deal marked a significant milestone in the development of the project.
He said, “Of particular interest to Delta State Government is the dividend that this UTM FLNG will generate, thus advancing the socio-economic development of our great state. It is expected that over 300,000 metric tonnes of LPG (cooking gas) will be produced and dedicated to the domestic market.
“This project will also help to mitigate the environmental hazards in the Niger Delta by reducing gas flaring. Of course, our women folk will also benefit from the fuel switch from kerosene and firewood to cleaner energy, thus improving their health and general well-being.
“Another benefit we envisage with this project is that it will create job opportunities for our youths, which is one of the four pillars of our MORE agenda.”
While commending the immediate past governor of the state, Senator Ifeanyi Okowa, for his foresight in investing in the venture, he lauded other stakeholders “like regulators and Afreximbank for helping to arrange financing and, of course, the dedicated staff of Delta State Investment and Development Agency for their resourcefulness.”
In his remarks, the Group CEO of NNPCL, Mr. Mele Kyari, commended the Delta governor for not just being a promoter of gas development in the country but for also investing in gas projects.
“We are happy to collaborate with the Delta State Government in this venture. The state government is here in two capacities, one as a supporter of growing gas utilization in the country and also now as an investor in this necessary industry but potentially a valuable industry for all of us,” Kyari added.
Also speaking, the Minister of State, Petroleum Resources, Ekprikpe Ekpo, noted that it was time for the country to begin the monetization of its huge gas reserves for the development of the economy.
In his remarks, Group Managing Director of UTM, Mr. Julius Rone, said the signing ceremony marks another significant milestone in actualizing Nigeria’s first indigenous FLNG.
Rone said he expects the Final Investment Decision on the project to be taken before the end of the first quarter of 2024. He commended the stakeholders for their support, especially the Delta government for investing in the project
“I want to thank the Delta State Government for taking an equity on this laudable project which will create other sources of revenue for the state to develop their infrastructure that is highly needed and create employment for the teeming youths of Delta State,” Rone said.
