Nigeria's UTM Offshore Seals Gas Deal, Paves Way for $3bn Floating LNG Project

Nigeria's UTM Offshore has reached a major milestone by securing a 15-year gas supply agreement, removing a critical barrier to advancing its $3 billion floating liquefied natural gas (FLNG) project. The deal is expected to enable a final investment decision in the fourth quarter of 2026, marking significant progress after previous delays.

Under the agreement, a joint venture between Nigeria's state-owned NNPC Ltd and independent operator Seplat Energy will supply 200 million standard cubic feet of gas daily to the UTM FLNG facility. The project is designed to produce 1.8 million tonnes of LNG annually from the Yoho field, contributing to Nigeria's efforts to monetise vast untapped gas reserves.

"The execution of this agreement establishes the long-term feed gas framework needed to advance project financing, construction and operations," said UTM Offshore Chief Executive Julius Rone at the signing ceremony in Abuja. The deal provides critical certainty for investors, lenders and international LNG buyers seeking stable supply commitments.

The project involves NNPC holding a 20% stake, UTM Offshore 72%, and Delta state government 8%. It received Nigeria's first licence for a floating LNG export facility in 2024, reflecting the government's push to unlock stranded gas reserves and expand LNG export capacity across the continent.

Nigeria possesses some of Africa's largest gas reserves but has struggled for decades to convert these resources into commercial exports due to funding constraints, infrastructure gaps and regulatory uncertainties. This project represents a significant step towards addressing those challenges and diversifying the nation's energy exports beyond crude oil.