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    Afreximbank mulls $5bn loan for Nigerian FLNG


The plant will monetise gas that would otherwise be flared.

by: Joseph Murphy

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Afreximbank mulls $5bn loan for Nigerian FLNG

The African Export-Import Bank (Afreximbank) has signed a memorandum of understanding to provide a loan of up to $5bn to support the development of Nigeria's first floating LNG (FLNG) plant, local press reported on December 9.

The MoU was signed with the project's developer, Nigerian firm UTM Offshore, and could see the bank provide as much as $2bn to support the scheme's first phase and a further $3bn to support its second.

The planned facility will initially produce up to 1.2mn metric tons/year of LNG using gas resources at the Yoho field within the shallow water OML104 block, operated by ExxonMobil and state-owned NNPC. The field already flows oil but has gas that are currently flared. UTM Offshore has said the plant could be up and running by 2025.

Its launch would bring an end to energy company Nigeria LNG (NLNG)'s monopoly over LNG exports. NLNG operates Nigeria's only active LNG terminal. Its current capacity is 22mn mt/yr, although the consortium took a final investment decision in December 2019 to add a seventh train and is undertaking other upgrades to raise output to 30mn mt/yr in 2024.

Nigerian authorities issued a licence for the FLNG plant in February, giving UTM two years to reach a final investment decision. UTM awarded a contract for pre-FEED work on the project to Japan's JGC in May, and US-based KBR is due to review the study.

UTM CEO Julius Rone said the project would "significantly contribute to the Nigerian government's agenda of reducing the flaring of associated gas across our industry." Nigeria, primarily an oil producer, is on a push to monetise more of its substantial gas reserves, estimated by BP at 5.5 trillion m3 proven. Commercialising gas that would otherwise be flared is a key part of the initiative.

"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," Rone said.