Nigerian energy firm UTM Offshore has secured a 15-year gas supply arrangement with NNPC Ltd and Seplat Energy Producing Nigeria Unlimited, strengthening the foundation for the development of its proposed $3 billion floating liquefied natural gas (FLNG) facility.
The agreement will provide the gas required to support the project, which is expected to advance towards a Final Investment Decision (FID) in the fourth quarter of 2026.
Through the deal, NNPC Ltd and Seplat Energy Producing Nigeria Unlimited will supply about 200 million standard cubic feet of natural gas per day (mmscf/d) to the FLNG project. The facility, which will utilise gas from the Yoho field, is expected to produce approximately 1.8 million tonnes of LNG annually.
UTM Offshore Chief Executive Officer, Julius Rone, said securing a dependable gas supply source was a major milestone for the project, as it creates a framework needed to move into financing, construction and operational phases.
He added that the agreement would provide assurance to key stakeholders, including investors, financial institutions and LNG buyers, as the company works towards reaching its investment decision.
Meanwhile, NNPC Limited Group Chief Executive Officer, Bayo Bashir Ojulari, said the partnership aligns with Nigeria’s strategy of using natural gas to drive industrial development and economic growth.
Ojulari described gas as a critical resource for expanding industrial activity, generating revenue and strengthening Nigeria’s energy sector.
The FLNG project is being developed through a partnership involving UTM Offshore, which holds a 72% interest; NNPC Ltd, with a 20% stake; and the Delta State Government, which owns 8%.
The project received approval as Nigeria’s first licensed floating LNG export facility in 2024 and is expected to contribute to efforts to unlock stranded gas resources while increasing the country’s LNG export capacity.
Despite its vast gas reserves, Nigeria has faced difficulties in maximising its natural gas potential due to challenges such as limited infrastructure, financing constraints and regulatory uncertainties.
UTM Offshore said the project’s Front-End Engineering Design (FEED) phase was completed in 2023 by JGC and Technip Energies.