Landmark agreement with the NNPC-Seplat joint venture strengthens financing prospects for Nigeria’s first indigenous floating LNG project
Nigeria’s ambition to expand its footprint in the global liquefied natural gas market through indigenous participation received a major boost on Tuesday as UTM Floating Liquefied Natural Gas Limited signed a 15-year gas supply agreement expected to unlock financing for the country’s first indigenous floating LNG project.
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The landmark UTM FLNG Gas Supply Deal, signed during the 2026 NOG Energy Week in Abuja, commits the NNPC/Seplat Energy Producing Nigeria Unlimited Joint Venture to supply 200 million standard cubic feet of wet gas per day to the UTM FLNG project over a 15-year period.
Industry stakeholders described the agreement as one of the project’s most critical commercial milestones because it guarantees the long-term supply of feed gas, a key requirement for lenders and investors before committing billions of dollars to the floating LNG facility.
Speaking after the signing ceremony, Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPC Ltd.), Bayo Ojulari, said the agreement marked a significant step in commercialising Nigeria’s vast gas reserves while advancing the Federal Government’s gas-led economic strategy.
“Today’s signing is not just an agreement; it is a declaration of intent to power Nigeria’s growth, prosperity and energy future through gas,” Ojulari said.
“This transaction demonstrates our collective commitment to the Presidential mandate for increased gas utilisation by 2030. Beyond supplying feed gas to the UTM FLNG project, this agreement aligns with Nigeria’s broader industrialisation agenda and energy transition objectives.”
According to Ojulari, the project is expected to create jobs, deepen local content participation, strengthen Nigeria’s competitiveness in the international LNG market and reduce carbon emissions by commercialising gas that could otherwise remain stranded.
“Perhaps most importantly, 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. That is a major milestone not only for the project but for Nigeria’s entire gas industry,” he added.
The NNPC chief said the initiative represents another decisive step towards transforming Nigeria from a predominantly crude oil exporter into a leading supplier of value-added natural gas products.
The Group Managing Director and Chief Executive Officer of UTM Offshore Limited, Julius Rone, described the signing as a defining moment for Nigeria’s first indigenous floating LNG development.
Rone said the long-term gas supply commitment provides the commercial certainty required to unlock project financing, begin construction and deliver liquefied natural gas to export markets.
“This agreement establishes the framework for the supply of feed gas to the FLNG facility. More importantly, it establishes the long-term offtake commitments and commercial certainty required to advance financing, construction and operations of the UTM FLNG project,” he said.
“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.”
Rone described the development as a milestone not only for UTM but also for Nigeria’s energy industry.
“This is a great day not only for UTM but for Nigeria. It is gratifying to witness a Nigerian company leading the development of a world-class LNG project while operating according to international best practices,” he said.
He also commended the Federal Government, NNPC Ltd. and Seplat Energy for supporting the project, expressing confidence that recent policy reforms would continue attracting investment into Nigeria’s gas sector.
Earlier, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the agreement reflected the growing role of indigenous companies in unlocking the country’s gas potential.
“This agreement demonstrates the growing strength of local content participation and private sector leadership in Nigeria’s gas sector.
“It reinforces investor confidence that Nigeria remains committed to creating an enabling environment through regulatory certainty, infrastructure development and competitive fiscal incentives,” Ekpo said.
The UTM FLNG project is designed to monetise gas from OML 104 at the Yoho Field offshore Akwa Ibom State through a floating liquefaction vessel capable of producing 1.8 million tonnes of LNG annually.
By processing gas offshore, the project eliminates the need for extensive onshore infrastructure, reducing development costs and accelerating commercial production.
The project has completed its Pre-Front-End Engineering Design (Pre-FEED) and Front-End Engineering Design (FEED) phases, secured a Licence to Construct from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, and obtained approval of its Nigerian Content Plan from the Nigerian Content Development and Monitoring Board for the Engineering, Procurement and Construction phase.
Its ownership structure comprises UTM Offshore Limited with 72 per cent, NNPC Limited with 20 per cent, and the Delta State Government holding the remaining eight per cent.
Nigeria holds more than 210 trillion cubic feet of proven natural gas reserves, the largest in Africa. However, inadequate infrastructure has historically limited the country’s ability to commercialise these resources.
The Federal Government’s Decade of Gas initiative was launched to address this challenge by encouraging investment across gas production, processing, transportation and exports.
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Against that backdrop, the UTM FLNG Gas Supply Deal represents a pivotal step towards expanding Nigeria’s LNG export capacity beyond the existing Nigeria LNG operations, while supporting industrialisation, enhancing energy security, increasing foreign exchange earnings and positioning indigenous firms at the forefront of the country’s evolving gas industry.
Oreoluwa is an accountant and a brand writer with a flair for journalism.
