UTM Offshore, JGC, KBR Sign First Floating LNG Pre-Feed Contract

By Emmanuel Addeh

An indigenous firm, UTM Offshore Limited, has signed a deal with Japan Gas Corporation (JGC), a leading international Engineering Design, Procurement and Construction (EPC) firm, to establish a Floating Liquefied Natural Gas (FLNG) facility, the first of its kind in Nigeria.

This followed the issuance of licence by the Department of Petroleum Resources (DPR) to establish the FLNG facility.

UTM Offshore Limited took a major step to actualise the project yesterday, signing virtually, a landmark preliminary front end engineering design (Pre-FEED) agreement with JGC.

According to the agreement, the Pre-FEED scope would be completed within four months from commencement date.

UTM has also engaged Kellogg Brown and Root (KBR) of the UK to provide owner’s engineering services on the project.

KBR is to provide due diligence on the JGC scope by conducting a third-party review of all deliverables from JGC during the Pre-FEED.

Speaking at the virtual signing event, the Managing Director of UTM Offshore Limited, Mr. Julius Rone, said JGC Corporation came highly recommended given the several similar projects the firm had undertaken across the world.

“What UTM is doing is largely novel. It is the first of its kind in Nigeria and we are very excited about this trail-blazing project: The opportunity to build from the scratch, the first floating liquefied natural gas facility in Nigeria is humongous. That is why we cannot afford to settle for less hence our resolve to contract JGC Corporation, one of the leading firms in the LNG Construction sector in the world, to provide the Pre-Front End Engineering Design Services for this first Floating LNG facility in Nigeria,” Rone said.

UTM Offshore Limited is pioneering the development of the FLNG facility in collaboration with LNG Investment Management Services (LIMS), a subsidiary of Nigeria National Petroleum Corporation (NNPC).

The facility, a newly-built vessel, will receive gas feedstock from an existing offshore facility, treat it to required LNG standard, liquefy the gas, store the LNG and offload to LNG carriers.

According to Rone, the floating LNG, when fully completed shall have an LNG production capacity of 1.2 million metric tonnes per annum (mmtpa), Turret and Mooring System, Gas pre-treatment modules, LNG production modules, living quarters, self-contained power generation and utilities as well as capacities for LNG storage and offloading.
At the landmark agreement signing event, Rone thanked President Muhammadu Buhari for creating an enabling environment for indigenous firms like UTM Offshore to equitably operate in the very sensitive and competitive upstream sector of the petroleum industry.

He said that the resolve of UTM Offshore to embark on the huge project is steeped in the National Gas Policy of the Buhari’s administration.

Rone said: “At UTM Offshore, we completely agree with Mr. President that given Nigeria’s potential of about 600 trillion cubic feet of gas, the commodity has the enormous potential to diversify our country’s economy.

“We also agree that the rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country.

“We thank the president for making gas development and utilization a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investments, and provide the much-needed jobs for our citizens in the country.”

He expressed appreciation to the Minister of State for Petroleum Resources, Chief Timipre Sylva, for tenaciously driving Mr. President’s vision in the petroleum sector, particularly the gas policy.

He also expressed gratitude to key players in the national petroleum industry, notably the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, and the Director of Department of Petroleum Resources (DPR), Mr. Sarki Auwalu, for their support for the FLNG project.

According to him, other partners and critical stakeholders that are supporting the FLNG project include Afreximbank, NAPIMS, Templars, Vitol, Yahaska Energy Services Limited and the government of Delta State.

“I am particularly thankful to the visionary Governor of Delta State, His Excellency, Dr. Ifeanyi Okowa, who from Day One, believed in our dream of building the first Floating LNG in Nigeria and has been of immense support since then.

“We cannot thank him enough. Indeed, we are assuring all our partners and stakeholders that we will not let them down,” Rone said.
Auwalu, who attended the event virtually lauded Rone and his team for blazing the trail in building Nigeria first Floating LNG. He said: “It is a historic event today as UTM Offshore working with our support is actualizing Mr. President vision not just for gas and the diversification of our economy.

“Mr. President has promised to migrate Nigeria to gas and that is what UTM Offshore is doing with the decision to build and operate and FLNG. It is a tortuous process but I can confirm that UTM Offshore has met all the requirements and that is why DPR gave the firm license to proceed with the building of the FLNG.

“At DPR we have been monitoring closely what UTM is doing and we are very happy that they are working with the best firms and consultants in the world, in fact, first-class and globally renowned firms are working with UTM Offshore to actualize this FLNG. DPR shall continue to guide and encourage UTM on this project.”

An executive of JGC Corporation of Japan, Mr. Koji Sakrai, praised the vision and tenacity of Rone and his firm, pledging the commitment of his company to deploy the latest and cost-effective engineering design and constructions modules in undertaking the project and assured that the task would be completed within schedule.

Present at the agreement signing were the representatives of the GMD of NNPC, Mr. Abubakar Umar; representatives of Vitol, Mr. Chibuzor Ifeanyi; while Mr. Steve Brown also of Vitol joined virtually.

An Executive Director, Afrexim Bank, Mr. Ibrahim Sagna, joined virtually, while Mr. Peter Olowononi and Mrs Ngozi Kalu-Mba, also from the bank attended the event.

Special Adviser on Investments to the Delta State Governor, Mr. Paul Nma, represented the governor, while Dr. Yahuza Kassim, who made a detailed presentation on the FLNG project represented Yahuza Energy Services.