UTM Offshore Secures 15-Year Gas Supply Deal, Moves Closer to $3bn LNG Project FID

UTM Offshore has secured a 15-year gas supply agreement for its planned $3 billion Floating Liquefied Natural Gas (FLNG) project, marking a major milestone towards reaching a Final Investment Decision (FID) expected in the fourth quarter of 2026.

The agreement, signed in Abuja on Tuesday, will see a joint venture between NNPC Limited and Seplat Energy supply 200 million standard cubic feet of gas per day to the UTM FLNG facility.

The project is designed to produce 1.8 million tonnes of liquefied natural gas annually using feedstock from the Yoho gas field, strengthening Nigeria’s efforts to monetise its vast natural gas reserves and boost LNG exports.

Speaking at the signing ceremony, Chief Executive Officer of UTM Offshore Limited, Julius Rone, said the agreement provides the certainty required to advance the project into its next phase.

“The execution of this agreement establishes the long-term feed gas framework needed to advance project financing, construction and operations,” Rone said.

He added that the deal would provide confidence to investors, lenders and LNG buyers while positioning the project for a final investment decision later this year.

“This agreement provides the certainty required by project stakeholders and strengthens the foundation for moving the project towards FID in the fourth quarter of 2026,” he said.

The UTM FLNG project received Nigeria’s first licence for a floating LNG export facility in 2024. The project is expected to play a significant role in unlocking stranded gas resources and supporting the Federal Government’s gas commercialisation agenda.

Ownership of the project is shared between UTM Offshore, which holds a 72 per cent stake, NNPC Limited with 20 per cent, and the Delta State Government with the remaining 8 per cent.

Nigeria holds one of Africa’s largest natural gas reserves but has struggled to fully commercialise the resource due to financing challenges, inadequate infrastructure and regulatory uncertainties. Industry stakeholders believe projects such as the UTM FLNG could help bridge this gap by creating additional export capacity and attracting fresh investments into the gas sector.

According to UTM Offshore, front-end engineering and design (FEED) work for the project was completed in 2023 by JGC Corporation and Technip Energies.

With the gas supply framework now in place, attention will shift to securing financing and concluding commercial arrangements ahead of the anticipated investment decision later this year.