Nigeria locks in 15 years of gas for its first floating LNG plant
NNPC and Seplat signed a 15-year, 200-million-cubic-feet-a-day gas supply deal with UTM Offshore, the bankability milestone that clears the way for a final investment decision on Nigeria's first indigenous floating LNG project.
Two hundred million standard cubic feet of gas a day, for fifteen years straight. That is the commitment Nigeria's state oil company and one of its largest independent producers just put in writing — not to a foreign supermajor, but to a homegrown floating LNG venture that has spent a decade trying to get off the drawing board.
On July 7, on the sidelines of the 25th NOG Energy Week in Abuja, the NNPC/Seplat Energy Producing Nigeria Unlimited joint venture signed a Wet Gas Sale and Purchase Agreement (WGSPA) with UTM Floating LNG Limited. Under the deal, the joint venture will supply 200 million standard cubic feet of gas per day (MMscf/d) from OML 104's Yoho field, offshore Akwa Ibom State, to feed UTM's planned floating liquefaction vessel. The agreement was signed by Bayo Ojulari, group chief executive of NNPC Limited, and Julius Rone, group managing director of UTM Offshore, and witnessed by Nigeria's ministers of petroleum resources for gas and for oil, Ekperikpe Ekpo and Heineken Lokpobiri.
The timing matters more than the ceremony. UTM FLNG has already cleared its engineering hurdles — pre-FEED and FEED studies are done, it holds a Licence to Construct from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, and its Nigerian Content Plan is approved. What it lacked was the one thing that makes a bank write a cheque: a guaranteed, long-dated gas supply a lender can underwrite against. "This agreement provides a clear line of sight to achieving the final investment decision on the UTM Floating LNG project within the fourth quarter of 2026," Ojulari said at the signing. Rone was blunter about what the deal actually buys: "It creates predictable revenue streams, assures LNG buyers of a stable and reliable supply, and gives lenders the confidence they require regarding the long-term commercial viability of this project."
Why floating, and why now
A floating LNG facility liquefies gas at sea, on a purpose-built vessel, instead of piping it ashore to a fixed onshore plant. For Nigeria, that distinction is the whole point. The country holds more than 210 trillion cubic feet of gas reserves — the largest in Africa — but a large share of it sits in fields too remote, or too gas-only, to justify the years and capital an onshore terminal demands. Floating LNG lets a company like UTM Offshore, majority-owned by the company itself (72%) alongside NNPC (20%) and the Delta State government (8%), monetize gas that would otherwise be flared or stranded, without waiting on a new pipeline network. Once operational, the vessel is designed to produce 1.8 million tonnes of LNG a year, plus roughly 300,000 tonnes annually of liquefied petroleum gas for Nigeria's domestic cooking-gas market — a detail that ties an export project directly to household energy costs at home.
The deal is also notable for who is doing the underwriting. UTM Offshore has already secured debt capital from Afreximbank, the Cairo-based trade financier that has become one of the continent's most active backers of African-led energy infrastructure, alongside equity from NNPC and the Delta State government. Global contractors JGC Holdings and Technip Energies are reviewing the EPCIC (engineering, procurement, construction, installation and commissioning) contract. That combination — African state and private capital in the equity stack, African development finance in the debt stack, foreign engineering only in the execution layer — is the structure Nigerian officials have spent years arguing the country's gas sector needs, and rarely gotten.
The exponential case, and its limits
The growth logic here compounds in two directions. First, gas monetized through UTM FLNG converts what is currently a stranded or flared resource into exportable revenue and, domestically, into LPG that displaces charcoal and firewood in millions of Nigerian kitchens — a cleaner-cooking dividend that pairs an export project with a public-health one. Second, a successful FID at UTM would be Nigeria's first indigenous-led FLNG project to reach that stage, a proof point other African gas-rich, pipeline-poor nations — Mozambique, Tanzania, even Nigeria's own more remote acreage — will be watching closely as a financing template.
But a signed gas supply agreement is not a done project. UTM Offshore's own targets, as relayed by Rone, point to an FID in the fourth quarter of 2026 and first gas production only by 2030 — four years out, in an industry where megaproject timelines routinely slip. The WGSPA removes one major financing risk; it does not remove construction risk, cost inflation, or the possibility that JGC and Technip's EPCIC review turns up complications that push the FID further out. Nigeria's Decade of Gas initiative, the federal policy framework this project is meant to advance, has set ambitious 2030 targets before; whether UTM FLNG hits its own remains, for now, a commitment on paper rather than gas in a tanker.
Still, for a country that has spent decades exporting crude while importing refined fuel, and flaring gas it could not get to market, a bankable, majority African-owned floating LNG project clearing its last major financing hurdle is a genuine marker of how far the model has moved — from concept, to contract, to (if the fourth quarter holds) a final investment decision.
