First floating LNG project: UTM Offshore targets September final investment decision
First floating LNG project
With financing secured, UTM Offshore says it is on track to take a Final Investment Decision on Nigeria’s first floating LNG project in September, paving the way for construction to begin in the first quarter of next year. Speaking to CNBC Africa at Nigeria Oil and Gas Week in Abuja, Group Managing Director, Julius Rone said 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 said it is aiming to take a final investment decision in September on what would become Nigeria’s first floating liquefied natural gas project, marking a key step for a development the company says could unlock stranded offshore gas, curb flaring and strengthen domestic fuel supply.
Speaking to CNBC Africa on the sidelines of Nigeria Oil and Gas Week in Abuja, UTM Offshore Group Managing Director Julius Rone said the project now has financing in place, giving it the momentum needed to move from agreements and contracting into execution.
Today is a great day for not just Nigeria, for the world, because in signing this gas agreement underpins that this project can proceed into the next stage,” Rone said, adding that the deal creates the certainty needed to advance the project through final investment decision, financing closeout and constructionAccording to Rone, UTM Offshore is working toward an FID in September, with additional milestones planned 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, allowing construction to start in the first quarter of next year.
The timeline is significant for Nigeria’s gas sector, which has long struggled to monetize substantial offshore resources, much of them stranded due to limited infrastructure. Floating LNG, or FLNG, is designed 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 response to that challenge. Nigeria, he said, has “a lot of gas resources that are stranded offshore,” while FLNG offers a proven way to process gas where it is produced, export volumes meant for international buyers and channel some products back into the domestic market.
One of the clearest local benefits cited by UTM Offshore is liquefied petroleum gas supply. Rone said more than 300,000 tons of LPG would be brought back into Nigeria to support the domestic market. That could help reduce the country’s reliance on imported LPG while expanding access to cleaner cooking fuel for households.
The domestic angle is increasingly important as Nigeria seeks to widen the use of gas under its broader energy transition strategy. LPG is seen as a cleaner alternative to traditional biomass fuels commonly used in homes, and wider penetration could help reduce indoor air pollution and deforestation.
Rone argued that the project could therefore generate both industrial and social benefits. By improving LPG availability, he said, the development would support cleaner cooking adoption and help move households, particularly women in rural and underserved communities, away from more polluting and less efficient energy sources.
UTM Offshore also cast the project as an environmental play, particularly in relation to gas flaring. Rone said part of the gas earmarked for the project is currently being flared, meaning the FLNG facility would capture gas that might otherwise be wasted and process it into LNG and LPG instead.
“That automatically you’re saving the environment,” he said.
Gas flaring has been a longstanding issue in Nigeria’s oil and gas industry, drawing scrutiny from regulators, communities and climate-focused investors. Converting flare gas and rejected gas into commercial products could improve project economics while aligning with pressure on producers to lower emissions and improve environmental performance.
Rone said the company has carried out significant environmental, social and governance work around the project and built eco-friendly systems into the floating LNG facility to minimize harm to surrounding communities and marine ecosystems. He said the design is intended to avoid polluting water and degrading the environment within the project’s area of operation.
Beyond the first development, UTM Offshore signaled broader ambitions to build out a pipeline of FLNG projects in Nigeria. Rone said the company is already looking at “Project 2 and Project 3,” drawing inspiration from Mozambique’s offshore LNG development path, where successive floating LNG projects have followed the first installation.
He said the strategy is centered on offshore stranded gas and fits with a wider push in Nigeria to prioritize gas development. Rone noted that the Nigerian National Petroleum Company is a partner in the project with a 20% stake, alongside other stakeholders, and said the latest gas agreement should help open the door to the construction phase.
The comments come as African energy projects attract renewed attention from investors seeking supply diversification amid geopolitical disruptions. Rone argued that recent instability affecting traditional energy routes has sharpened international interest in Africa as an alternative source of supply.
“We’re looking at a huge investment flow into the African continent,” he said, adding that in his view the next 12 months could bring a surge in capital as global buyers and investors look for new, reliable export sources.
For international investors considering Nigeria specifically, Rone said trusted local partnerships would be essential. He described UTM as a credible local operator that has worked to build its reputation and attract global capital, while insisting that Nigeria is becoming more aligned with international business standards.
His message was that the country is increasingly open for business, with stronger investor confidence and fewer of the concerns that once discouraged foreign participation. Whether that optimism translates into project execution will likely depend on UTM Offshore meeting its September FID target and locking in the commercial and engineering agreements needed to begin construction in early 2026.
If it does, the project would mark 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.
