The floating plant is set to produce condensate alongside LNG and petroleum gas. Credit: Kate Scott/Shutterstock.

Nigerian company UTM Offshore has received a licence to construct what it asserts will be the country’s first floating LNG plant.

The project aims to utilise Nigeria’s vast gas reserves, estimated at more than 209 trillion cubic feet, reported Reuters.

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The floating LNG facility, with an increased capacity of 2.8 million tonnes per annum (mtpa), will capture flared gas from ExxonMobil’s Oil Mining Lease 104 (Yoho field) located offshore in Akwa Ibom, southern Nigeria.

Bloomberg News quoted Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) head Farouk Ahmed as saying that the project secured a licence to build a 1.2mtpa in 2019.

However, the project’s capacity was upgraded to 2.8mtpa “because of increased LNG demand in the market”.

UTM Offshore CEO Julius Rone announced that the engineering work for the plant is scheduled for completion in 2028, with production commencing in the first quarter of 2029.

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Rone further detailed that the facility would supply 500,000 tonnes of liquefied petroleum gas to the domestic market, while the LNG produced would be earmarked for export.

Additionally, the plant is set to produce condensate alongside LNG and petroleum gas.

Financing for the project’s first phase, amounting to $2.1bn, has been secured through Afreximbank, which has also pledged $3bn for the second phase.

UTM Offshore has finalised contracts with Japan’s JGC and KBR for the design of the project.

Moreover, an off-take agreement for the LNG produced at the facility has been established with Vitol Group.

In a strategic move last year, state-owned Nigerian National Petroleum acquired a 20% stake in the project.