Liquefied Natural Gas (LNG) Uncategorized

UTM Offshore signs $2bn MoU with Afreximbank for Nigeria’s first FLNG project

The agreement paves the way for additional collaboration between UTM Offshore and the Afreximbank to support a future final investment decision (FID) on UTM’s FLNG project.

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Nigerian marine and services group UTM Offshore and the African Export-Import Bank (Afreximbank) have signed a Memorandum of Understanding (MoU) to raise $2 billion for the development of Nigeria’s first floating liquefied natural gas (FLNG) project.

The MoU was signed yesterday in Abuja by Julius Rone, Group Managing Director/CEO of UTM Offshore and Dr. Benedict Okey Oramah, President and Chairman of Afreximbank. “This is a landmark project that Afreximbank takes very seriously,” Afreximbank’s president said.

The agreement paves the way for additional collaboration between UTM Offshore and the Afreximbank to support a future final investment decision (FID) on UTM’s FLNG project. The company has been studying and conceptualising the development of an FLNG in Nigeria since 2020.

In February 2021, it received a License to Establish (LTE) from Nigeria’s former Department of Petroleum Resources (DPR) for the installation of an FLNG unit on oil mining lease (OML) 104. The block is operated by the joint-venture of Mobil Producing Nigeria (operator, 40%) and the state-owned Nigerian National Petroleum Corp. (NNPC, 60%) and contains the producing Yoho field.

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 and completed in October. KBR was appointed Owners Engineer while global energy and commodities trader Vitol has also joined the consortium as off-taker for the LNG.

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

Julius Rone, Group Managing Director/CEO, UTM Offshore

The project notably 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.

UTM Offshore is pioneering the development of the FLNG facility in collaboration with LNG Investment Management Services (LIMS), a subsidiary of the state-owned Nigeria National Petroleum Corporation (NNPC).

Details on the UTM FLNG can be found in the “Projects” section within your Hawilti+ research terminal.

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American digital infrastructure company Equinix to acquire MainOne for $320m

Equinix has revealed yesterday its intention to expand into Africa by acquiring African data center and connectivity solutions provider MainOne. The acquisition is valued at $320m and is expected to close in Q1 2022. By acquiring MainOne, Equinix would gain a strong foothold in Nigeria, Ghana and Côte d’Ivoire where MainOne has already built data centers. The Nigeria-based company currently has three operational data centers in West Africa, with an additional facility in Ghana currently under construction. MainOne also owns and operates an extensive submarine network extending 7,000 kilometers from Nigeria to Portugal, as well as 1,200 kilometers of reliable terrestrial fiber network across southern Nigeria. The American company sees the move as its first step towards its long-term strategy of becoming a leading African carrier neutral digital infrastructure company. Under the terms of the transaction, MainOne’s management team, including CEO Funke Opeke, will continue to serve in their respective roles.

FAR Ltd “encouraged” by preliminary findings at Bambo-1 offshore The Gambia

Australian independent FAR has advised that the Bambo-1 well offshore The Gambia has drilled 3,216m measured depth below the rotary table (MDBRT) out of 3,450m. The well has detected oil indications in rock cuttings and logging whilst drilling (LWD) data has interpreted hydrocarbons across several intervals. “Further wireline logging needs to be completed to confirm the finding,” Far said this morning. The company has also announced an increase in the drilling campaign’s cost after significant fluid losses were experienced, forcing the temporary halt of drilling operations. FAR is now planning to plug and side-track the well to continue drilling to the planned total depth. As a result, completing the Bambo-1 well is now expected to cost a total of $61.27m, up from $51.4m. According to FAR, the addition of the side-track programme has also extended the period of operation. Completion is now expected at the very end of 2021. Bambo-1 was spudded in mid-November and is drilling into a series of vertically staked targets with a combined estimated recoverable prospective resource of over 1 billion barrels. Chances of geological success range from 7% to 36%. It is FAR’s second exploratory well on the A2 Block after it drilled the Samo-1 well in 2018. Its main targeted horizons had then proved water bearing. FAR’s success case planning at Bambo-1 relies on a development of 150m barrels of oil via a 48,000 barrels of oil per day (bopd) floating, production, storage and offloading (FPSO) vessel. Three wells would then support production, gas and water injection operations.