Nigeria: UTM Offshore Secures 15-Year Gas Supply Deal With NNPC Ltd And Seplat Energy

Nigerian energy company UTM Offshore has signed a 15-year gas supply agreement with state-owned NNPC Ltd and Seplat Energy Producing Nigeria Unlimited, paving the way for a final investment decision on its proposed $3 billion floating liquefied natural gas (FLNG) project.

Under the agreement, NNPC Ltd and Seplat Energy Producing Nigeria Unlimited will supply 200 million standard cubic feet (5.7 million cubic metres) of natural gas per day to the UTM FLNG project, which is designed to produce 1.8 million tonnes of LNG annually from gas sourced from the Yoho field.

UTM Offshore Chief Executive Julius Rone said the agreement establishes the long-term feed gas framework required to advance project financing, construction and operations.

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

He said the agreement would provide certainty for investors, lenders and LNG buyers, positioning the project for a final investment decision in the fourth quarter of 2026.

NNPC Group Chief Executive Officer Bayo Bashir Ojulari said the agreement supports the federal government’s gas-led industrialisation strategy and is expected to strengthen gas utilisation.

“What we are witnessing today is not just about signing agreements. It is about igniting the engine of Nigeria’s industrialisation,” Ojulari said.

“Gas is the key. It is a source of revenue and profit. It is also the only resource that can have this level of industrial impact on Nigeria, more than any other hydrocarbon.”

The UTM FLNG project, in which NNPC Ltd holds a 20% stake, UTM Offshore 72% and the Delta State Government 8%, received Nigeria’s first licence for a floating LNG export facility in 2024. The project forms part of the government’s strategy to monetise stranded gas reserves and expand LNG exports.

Nigeria holds some of Africa’s largest natural gas reserves but has struggled for decades to commercialise much of the resource because of funding constraints, inadequate infrastructure and regulatory uncertainty.

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