UTM Offshore Targets Key September Investment Decision For Floating LNG Facility

With the financing now secured, UTM Offshore says it is on track to make a Final Investment Decision on Nigeria’s first floating LNG project in September, with construction expected to start in the first quarter of next year. Julius Rone, Group Managing Director, told CNBC Africa at Nigeria Oil and Gas Week in Abuja that the project will support gas monetisation, reduce gas flaring, strengthen domestic Liquefied Petroleum Gas supply and position Nigeria as a more attractive destination for energy investment.

UTM Offshore has set a goal of a final investment decision in September on what would be Nigeria’s first floating liquefied natural gas project, a critical move for a development that the firm says could unlock stranded offshore gas, cut flaring and boost domestic fuel supply.

The project now has financing in place, giving it the momentum to move from agreements and contracting into execution, said UTM Offshore Group Managing Director Julius Rone, speaking to CNBC Africa on the sidelines of Nigeria Oil and Gas Week in Abuja.

“Today is a great day for not only Nigeria but the world because signing this gas agreement underpins that this project can go to the next stage,” Rone said, adding that the deal provides the certainty needed to move the project through final investment decision, financing closeout and construction.Rone said UTM Offshore is targeting a FID in September, with more milestones to come before year-end.

He said the company expects to sign the gas supply agreement and the engineering, procurement, construction, installation and commissioning contract before Christmas, which will allow construction to start in the first quarter of next year.

The timeline is crucial for Nigeria’s gas sector, which has struggled for years to monetize large offshore resources, much of them stranded by limited infrastructure. Floating LNG, or FLNG, is meant to process natural gas at sea, directly at or near the field location, allowing companies to liquefy and export gas without waiting for extensive onshore pipelines and processing plants.

Rone framed the project as a strategic answer to that challenge. He said Nigeria has “a lot of gas resources that are stranded offshore”. FLNG, he said, offers a proven way to process gas where it is produced, export volumes bound for international buyers and channel some products back into the domestic market.

One of the most concrete local benefits UTM Offshore refers to is the supply of liquefied petroleum gas. Rone said over 300,000 tons of LPG would be sent back to Nigeria to support the domestic market. This could reduce the country’s reliance on imported LPG, while also increasing access to cleaner cooking fuel for households.

The domestic angle is becoming more important as Nigeria seeks to increase the use of gas under its wider energy transition strategy. LPG is a cleaner alternative to traditional biomass fuels typically used in homes and greater penetration could help reduce indoor air pollution and deforestation.

The project could provide industrial and social benefits consequently, Rone said. He said the development would improve LPG availability, which would support the adoption of cleaner cooking and help households, especially women in rural and underserved communities, transition away from more polluting and less efficient energy sources.

UTM Offshore also framed the project as an environmental play, especially on the issue of gas flaring. Rone said that some of the gas earmarked for the project is being flared today, so the FLNG facility will capture gas that would otherwise be wasted and convert it into LNG and LPG.

That automatically you’re saving the environment,” he said.

Gas flaring has long been a thorn in the side of Nigeria’s oil and gas sector, inviting criticism from regulators, communities and climate-conscious investors. Converting flare gas and rejected gas to commercial products can improve project economics and help address pressure on producers to reduce emissions and improve environmental performance.

“We’ve done a lot of environmental, social and governance work on the project,” Rone said, adding the company has built eco-friendly systems into the floating LNG facility to minimize harm to surrounding communities and marine environments. “The design is to prevent water pollution and damage to the environment within the operating area of the project,” he stated.

In addition to the first development, UTM Offshore indicated wider ambitions to develop a pipeline of FLNG projects in Nigeria. The company is already considering “Project 2 and Project 3” to succeed the first installation, Rone said, referring to the offshore LNG development history in Mozambique where a number of floating LNG projects have been implemented after the first one.

He said the strategy is around offshore stranded gas and fits with a broader push in Nigeria to focus on gas development. The Nigerian National Petroleum Company is a partner in the project with a 20% stake, alongside other stakeholders, Rone noted, and said the latest gas agreement should help open the door to the construction phase.

The comments follow a renewed focus by investors on African energy projects aiming to diversify supply in the face of geopolitical disruptions. “The recent instability affecting traditional energy routes has increased international interest in Africa as an alternative source of supply,” Rone said.

“There is a huge flow of investment into the African continent,” he said, adding that he believed the next 12 months could see a flood of capital as global buyers and investors looked for new reliable sources of exports.

As for Nigeria specifically, Rone said trusted local partnerships would be key to international investors. “UTM is a credible local operator that has worked to build its reputation and attract global capital,” he said, insisting that Nigeria is becoming more aligned with international business standards.

His message was that the country is more open for business, with greater investor confidence and fewer concerns that previously deterred foreign participation. How much of that optimism translates into project execution will likely come down to whether UTM Offshore meets its September FID target and lands the commercial and engineering deals needed to begin construction in early 2026.

If it does, the project would be a milestone for Nigeria’s gas industry: the launch of its first floating LNG development and a potentially important test case for how the country can commercialize offshore gas, reduce flaring and deepen its position in global energy markets.