By Stephen Simon
Nigeria has recorded a major milestone in its drive to expand natural gas exports after UTM Offshore secured a 15-year gas supply agreement for its proposed $3 billion Floating Liquefied Natural Gas (FLNG) project, clearing one of the biggest hurdles to a final investment decision expected later this year. The agreement is expected to strengthen investor confidence and accelerate the development of the landmark energy project.
Under the agreement, a joint venture comprising the NNPC Limited and Seplat Energy will supply 200 million standard cubic feet of gas per day from the Yoho field to the UTM FLNG facility. The project is designed to produce about 1.8 million tonnes of liquefied natural gas annually for export to international markets.
Speaking at the signing ceremony in Abuja, Julius Rone said the agreement establishes the long-term gas supply framework required to advance project financing, construction and future operations. He noted that securing guaranteed feed gas is a critical requirement for attracting investors, lenders and potential LNG buyers.
Rone expressed optimism that the agreement would pave the way for the project’s Final Investment Decision (FID), now expected in the fourth quarter of 2026 after earlier delays. He said the project would contribute significantly to Nigeria’s ambition of becoming a leading global supplier of liquefied natural gas while creating jobs and stimulating economic growth.
The UTM FLNG project is Nigeria’s first floating LNG export facility and is owned by UTM Offshore with a 72 per cent equity stake, while NNPC Limited holds 20 per cent and the Delta State Government owns the remaining eight per cent. The project received Nigeria’s first licence for a floating LNG export plant in 2024 as part of efforts to commercialise the country’s vast natural gas reserves.
Although Nigeria possesses one of Africa’s largest proven natural gas reserves, the country has struggled for decades to fully harness the resource because of inadequate infrastructure, financing challenges and regulatory bottlenecks. Industry experts believe the successful delivery of the FLNG project could unlock stranded gas resources, increase export earnings and improve energy security.
With front-end engineering and design already completed by JGC and Technip Energies, attention is now shifting to project financing and construction. Energy analysts say the successful implementation of the project would mark a significant milestone in Nigeria’s gas development strategy and reinforce the Federal Government’s commitment to using natural gas as a key driver of economic diversification and industrial development.
