High Cost of Cooking Gas: Julius Rone’s UTM FLNG to the Rescue By Jude Ndukwe

Energy crises in Nigeria seem to be both perennial and intractable. From the undulating cost of petrol to the unstable price of gas, the wheels seem to have fallen off the rails for energy consumers as the situation keepsgetting worse by the day.

Kerosene which used to be the commonest energy source for domestic use for most of the Nigerian populace has since gone out of the reach of the poor who have resorted to firewood and charcoal despite their negative effects on health and the environment.

And when this category of people falls sick due to their continued exposure to such sources of energy, they still lack the finances to get proper treatment. Some households in the rural areas have even resorted to the use of plastic bottles as their source of fire for cooking.The effects of all these are quite debilitating to users!

However, there is light at the end of the tunnel as efforts of a truly committed and patriotic indigenous company in the gas industry will soon return smiles to the face of Nigerians. This is because UTM FLNG, a special purpose vehicle created by UTM Offshore Ltd, UTMOL, to make gas available and affordable for domestic, auto, industrial uses, and even for export, has revved up action to build a Floating Liquefied Natural Gas, FLNG, the first to be wholly owned by an indigenous gas firm.

Gas is certainly taking over as the preferred alternative energy to drive households and the nation’s economy. As Nigerian National Petroleum Corporation Limited, NNPCL’s Executive Vice President, Mr Mohammed Ahmed, said recently, gas is a transition fuel which is beginning to drive almost everything being done in Nigeria today, hence, the world now views Nigeria more as a gas nation than as a fuel nation.

The challenge therefore becomes how to make this important source of energy available and affordable to the people so that citizens enjoy the immense benefits associated with it.

The nation needs energy companies that are truly committed to the welfare of the people even if beyond profit. Achieving this means all stakeholders with related vision must find ways of working together to make this happen.

This is where Mr Julius Rone’s UTM FLNG comes in. As an indigenous gas company, UTM FLNG has traversed the globe to painstakingly select the best firms to partner with in their quest to make gas not only available and affordable to Nigerians but to also ensure its sustenance, and security of the nation’s earnings in that sector. This journey has seen the company partner with leading international organisations like JGC of Japan, Technip of France and KBR. It is remarkable that this consortium also built the 6 (six) existing LNG Trains for Nigerian LNG Ltd.

It is in further pursuit of excellence and the aim to crash the cost of cooking gas and other forms of gasthat Mr Julius Rone, fondly referred to as The Gas King in that sector, led his management team and partners to sign the Heads of Terms Agreement withNNPCL to build Nigeria’s first Floating Liquefied Natural Gas, FLNG. The signing ceremony which held at the NNPCL’s corporate headquarters spells out terms of 20 per cent equity contributions of the NNPCL in the UTM FLNG Project.

As Mr Rone aptly put it after the signing, “This is a landmark achievement for an indigenous company to partner with one of the world’s best energy conglomerates, the NNPCL. The importance we attach to this project because of its immeasurable value to our country means we have to be meticulous about the quality of those we engage in it”.

Earlier in his visit to the President, Asiwaju Bola Ahmed Tinubu, to introduce the project, Mr Rone promised that the project would be delivered by the last quarter of 2026. With that commitment, UTM FLNGhas outlined phased completion timeline for the project and is working assiduously to ensure its realization as scheduled.

Excited by the prospects which the FLNG project holds, the President promised that his government will provide conducive environment for the UTM FLNG project to thrive, as well as for other genuine local and foreign investors.

The front-end engineering design, FEED, of the project is ongoing in Lagos, Yokohama and Paris. This stage enables the company to properly assess the cost, prepare a full budget and work towards the Final Investment Decision, FID, by the fourth quarter of this year.

The complex nature of the project requires such punctilious approach to it in all ramifications including timelines and quality. The facility will be located about 60km offshore at 64m water depth; it will produce 1.7mmtpa of LNG and 300,000 metric tonnes of LPG (cooking gas) which represents 25 per cent of national demand and which will be fully dedicated to the domestic market when completed. It will also create an estimated 3,000 direct and 4,000 indirect jobs for the people with enormous opportunities for both local and foreign investments. The LPG produced will help crashthe price of cooking gas, improve the socioeconomic wellbeing of the people, reduce deforestation, gas flaring and its attendant carbon emission. This is music to the ear!

The importance of the project was further highlighted during the signing ceremony by the management of NNPCL which stated that the abundance of gas reserves in Nigeria would not be beneficial to Nigeria and Nigerians if companies like UTM FLNG do not invest in getting the reserves extracted. The energy conglomerate emphasized its commitment to the actualization of the project which it described as being of utmost importance to Nigeria by taking up 20 per cent equity in it. “NNPCL is fully into this project, to support it, invest in it and also ensure that there is energy availability, sustainability, affordability and security for the country”, the corporation’s executive vice president, gas, power and new energy, MrMohammed Ahmed stated.

The Group Chief Executive Officer of NNPCL, MrMele Kyari further expressed confidence in the ability and capacity of UTM FLNG to bring the project to an effective realization and that NNPCL’s investment in it is indicative of that fact.

No wonder Mr Julius Rone who is fondly called The Gas King by industry players declared on the day of the signing of the Heads of Terms Agreement that “Today is a great day for Nigeria…We are very proud to work with NNPCL to deliver the first floating LNG. We believe that with NNPCL on board this project, by the special grace of God, we will deliver the first floating energy by December 2026 just as we promised Mr President”.

The countdown to the era of a more accessible and affordable gas in Nigeria has just begun. To achieve this landmark objective, hands of all stakeholders have to be on deck to deliver as earmarked.

Jude Ndukwe, a public affairs analyst, sent this piece from Abuja. He can be reached via [email protected]