Delta, NNPCL, and a company are set to collaborate on the development of a floating gas plant
On Tuesday, the Delta State Government, Nigerian National Petroleum Company Limited (NNPCL), and UTM Offshore Limited formally entered into a shareholders agreement for the development of Nigeria's inaugural Floating Liquefied Natural Gas (FLNG) project. This significant development was disclosed in a statement released by the Delta State Ministry of Information, and copies were made available to journalists in Warri on Wednesday.
The signing ceremony saw the Secretary to the State Government, Dr. Kingsley Emu, and the Solicitor General and Permanent Secretary of the Ministry of Justice, Mr. Omamuzo Erebe, representing the Delta State Government. On behalf of NNPCL and UTM Offshore, the Group Chief Executive Officer, Mr. Mele Kyari, and Group Managing Director, Julius Rone, respectively, signed the agreement.
As outlined in the agreement, the ownership distribution for the project is allocated as follows: Delta State Government will possess an eight percent share, NNPC Limited will hold 20 percent, and UTM Offshore will have the majority stake of 72 percent.
Addressing the signing ceremony held at the NNPC Towers in Abuja, Governor Sheriff Oborevwori of Delta State emphasized that the UTM FLNG Project marked a groundbreaking milestone as the first of its kind developed by a Nigerian indigenous private company.
Governor Oborevwori further clarified that the state government opted for an 8% equity stake in the Floating Liquefied Natural Gas (FLNG) project due to its strong belief in the project's strategic significance for the national economy. He underscored the worthiness of this investment, considering that Delta State holds 40% of Nigeria's proven gas reserves.
The governor highlighted that the agreement represented a notable achievement in advancing the project's development. He expressed, "Of specific importance to the Delta State Government is the anticipated dividend from the UTM FLNG, contributing to the socio-economic progress of our esteemed state. The project is expected to yield over 300,000 metric tonnes of LPG (cooking gas), exclusively allocated for the domestic market."
"This initiative is poised to address environmental challenges in the Niger Delta by diminishing gas flaring. Additionally, our women stand to gain from the transition from kerosene and firewood to cleaner energy, leading to enhanced health and overall well-being.
"We anticipate that this project will also contribute to job creation for our youth, aligning with one of the fundamental pillars of our MORE agenda."
While expressing appreciation for the forward-thinking approach of the immediate past governor, Senator Ifeanyi Okowa, in investing in this venture, the governor commended other stakeholders, including regulators and Afreximbank, for their role in arranging financing. He also acknowledged the dedication of the staff at Delta State Investment and Development Agency for their resourcefulness.
During his statement, Mr. Mele Kyari, the Group CEO of NNPCL, praised the Delta governor for not only championing gas development in the country but also for actively investing in gas projects.
"We are delighted to join forces with the Delta State Government in this endeavor. The state government plays a dual role here, serving as an advocate for the expansion of gas utilization in the country and, concurrently, as an investor in this vital industry with potential benefits for all of us," added Kyari.
Adding to the discussion, the Minister of State for Petroleum Resources, Ekprikpe Ekpo, emphasized that it is opportune for the country to initiate the monetization of its substantial gas reserves to foster economic development.
In his comments, Mr. Julius Rone, the Group Managing Director of UTM, stated that the signing ceremony signifies another notable stride in realizing Nigeria's first indigenous Floating Liquefied Natural Gas (FLNG). Rone anticipates that the Final Investment Decision for the project will be made by the conclusion of the first quarter of 2024. He expressed gratitude to the stakeholders for their support, particularly acknowledging the Delta State Government for its investment in the project.
"I want to express my gratitude to the Delta State Government for taking an equity stake in this commendable project, which will generate additional revenue sources for the state to enhance its infrastructure, addressing crucial needs, and providing employment opportunities for the youth of Delta State," remarked Rone.
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