The deal, which is in two parts, will see the continental bank (Afreximbank) raising $2 billion to support the first phase with a commitment to fund the second phase of the project by another $3 billion.

Signed by the Group Managing Director/CEO of Utm Offshore, Julius Rone, and President and Chairman of Afreximbank, Dr. Benedict Okey Oramah, the MoU paves the way for additional collaboration between the two entities to support a future final investment decision (FID) on the project, which UTM has been studying and conceptualising since 2020.

UTM Offshore Limited was granted a licence to establish (LTE) by Nigeria’s former Department of Petroleum Resources (DPR) for the installation of an FLNG unit on oil mining lease (OML) 104 in February 2021.

The block, which contains the producing Yoho field, is operated by the joint-venture of Mobil Producing Nigeria (operator, 40 per cent) and the state-owned Nigerian National Petroleum Corporation (NNPC, 60 per cent).

Preparations for the project are now in full swing and benefit from robust global and technical expertise. The pre-Front End Engineering Design (Pre-FEED) contract was awarded to JGC Corporation of Japan in May 2021 while KBR was appointed Owners Engineer. Global energy and commodities trader, Vitol, has also joined the consortium as an off-taker for the LNG.

“The UTM Offshore FLNG will be the first of such a project developed by an African company on the continent,” Rone said, adding: “It will also significantly contribute to the Nigerian government’s agenda of reducing the flaring of associated gas across our industry.”

According to him, “As Africa’s FLNG industry grows, we are well-positioned to offer attractive project economics by developing shallow water gas reserves, while bringing significant environmental benefits to our industry as a whole.”

The project involves the development and financing of a 1.2m tonnes per annum FLNG facility with a capacity to process 176 MMscfd of natural gas and condensate.

The unit would target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets.

Oramah, at the signing ceremony, commended Rone and his UTM team for rising up to one of the greatest challenges of this era.

“Across the world, nations are evolving climate change goals; Africa has not been able to leverage the abundant opportunities in the continent to help meet the global climate change goals,” the bank’s chief said, explaining: “That is why Afreximbank considers what UTM Offshore is doing, the development of Nigeria’s first FLNG not just unique but laudable.”

He said the company was helping not just Nigeria but the whole of Africa to transition to clean energy and in the process, the firm is creating huge employment opportunities for Nigerians.

“This is a landmark project that Afreximbank takes very seriously,” Oramah said. Beyond financing UTM’s FLNG project to the tune of $5billion in two phases, the president of Afreximbank disclosed that the bank would be ready to offer other financial and insurance support services to the FLNG project.

He said If this project succeeded, it would create jobs and aid development in Nigeria, and even more important, it would prove that Africa had become serious about climate change goals and would further prove that Nigerians can use the abundant potentials in Nigeria to develop Nigeria.

“Truth is that nobody will develop Nigeria but Nigerians. UTM Offshore Limited, an indigenous company led by Mr. Julius Rone, has shown that it has the capacity to help develop Nigeria. It is within the mandate of Afreximbank to support what UTM is doing in Nigeria,” the Afreximbank president said.

According to Rone, the floating LNG, when fully completed in 2026, shall have an LNG production capacity of 1.2 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.