UTM Offshore has secured a 15-year gas supply agreement, clearing one of the final major hurdles for its $3 billion Floating Liquefied Natural Gas (FLNG) project and paving the way for a final investment decision later this year. According to Reuters, the agreement was signed with a joint venture between NNPC Ltd and Seplat Energy Producing Nigeria Unlimited, which will supply 200 million standard cubic feet of natural gas per day from the Yoho field to the FLNG facility. The milestone positions the project for a final investment decision (FID) in the fourth quarter of 2026 after previous delays.
The UTM FLNG project is designed to produce 1.8 million tonnes of liquefied natural gas (LNG) annually, helping Nigeria monetise its vast offshore gas reserves while expanding export capacity. Speaking at the signing ceremony in Abuja, UTM Offshore Chief Executive Officer Julius Rone said the agreement establishes the long-term feed gas framework required to advance project financing, construction, and operations. He added that the certainty provided by the supply arrangement would strengthen confidence among investors, lenders, and prospective LNG buyers.
The project, which received Nigeria’s first licence for a floating LNG export facility in 2024, is owned by UTM Offshore (72%), NNPC Ltd (20%), and the Delta State Government (8%). Front-end engineering and design were completed in 2023 by JGC Corporation and Technip Energies, laying the technical foundation for the project. The development forms part of Nigeria’s broader strategy to commercialise its estimated 209 trillion cubic feet of natural gas reserves, much of which has remained underutilised because of infrastructure gaps, funding constraints, and regulatory challenges.
For Nigeria’s energy sector, the gas supply agreement represents a significant step toward unlocking new LNG export capacity and strengthening the country’s position in the global natural gas market. Analysts say successful execution of the UTM FLNG project could attract fresh investment into offshore gas development, reduce gas flaring, diversify export earnings beyond crude oil, and reinforce Nigeria’s ambition to become one of the world’s leading LNG exporters.
