Each week, Offshore Technology’s editors select a deal that illustrates the themes driving change in our sector. The deal may not always be the largest in value or the highest profile, but we select it because of what it tells us about where the leading companies are focusing their efforts, and why. We pick apart the deal itself and the industry theme behind it. This new, thematic deal coverage is driven by our underlying Disruptor data, which tracks all major deals, patents, company filings, hiring patterns and social media buzz across our sectors.
The deal
NNPC, Nigeria’s state-owned oil and gas company, has announced an agreement with UTM Offshore to take a 20% stake in the country’s first-ever floating liquified natural gas (FLNG) project.
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Why it matters
The deal means that NNPC is expanding its gas development portfolio and strengthening energy security at a time when its oil revenues are stunted. NNPC CEO Mele Kyari described the deal as a “must-do” initiative. Nigeria exported 6.3 million tonnes of liquefied natural gas (LNG) in 2022, the second most in Africa, but far behind Algeria’s 29.3 million tonnes.
In September 2022, it was announced that Nigerian oil exports were at their lowest levels in 25 years, a consequence of unabated oil theft in the country. At multiple points in 2022, the country was overtaken by Angola as the continent’s largest oil exporter.
Meanwhile, gas is in a period of growth for Nigeria. In October 2022, the NNPC announced plans to build a natural gas pipeline from Nigeria to Morocco, which will supply gas to 11 different countries. The $25bn pipeline, should it be realised, would see Nigerian gas exports spread across North Africa and Southern Europe.
Although the UTM Offshore project will be the country’s first FLNG project once constructed, it is not the first stride NNPC has made into FLNG. In April, the company signed a memorandum of understanding with Norway’s Golar LNG to build a FLNG vessel. It means that NNPC is invested in ensuring that its gas reserves are among the biggest in Africa.
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By GlobalDataThe detail
The deal means that NNPC will take a 20% stake in the 1.5 million-tonnes-per-year FLNG vessel, which will operate in Nigeria’s Yoho offshore gas field. NNPC hopes it will produce as much as 176 million cubic feet of gas per day.
