Nigerian gas tycoon Julius Rone targets September go-ahead for $3 billion floating LNG plant

Julius Rone is aiming to take a final investment decision on Nigeria's first floating liquefied natural gas plant in September, moving ahead of the fourth-quarter timeline his partners have given publicly, with one of the three commercial agreements the project needs still unsigned.

The Nigerian businessman, who controls UTM Offshore and is promoter shareholder of UTM FLNG Limited, said the project has financing in place and enough momentum to move out of contracting and into execution. He set out the September target in an interview with CNBC Africa on the sidelines of Nigeria Oil and Gas Energy Week in Abuja, where UTM had just closed the feed gas agreement that had held the venture up.

NNPC Limited and UTM both put the decision in the fourth quarter of 2026 in their statements at the signing. Rone's September target would bring it forward, with further milestones planned before the end of the year.

What is still outstanding

Rone has described the path to construction as three agreements. The first was the gas supply contract, executed on July 7 as a 15-year Wet Gas Sale and Purchase Agreement with the joint venture between NNPC Limited and Seplat Energy Producing Nigeria Unlimited. It commits the venture to deliver 200 million standard cubic feet of gas a day, or 5.7 million cubic metres, to the floating facility.

The second is the sales and purchase agreement covering the LNG itself. Rone has said UTM agreed heads of terms with its offtaker and has made good progress on negotiations, though the buyer has not been named publicly. He said in 2024 that UTM had an international offtaker prepared to market cargoes into Europe and other markets. That agreement remains the outstanding condition for a decision.

Debt financing sits with the African Export-Import Bank, which signed a project preparation facility with UTM in June 2023 and became lead financier. Rone said the debt tranche is fully subscribed and that lenders are still asking to join the syndication.

Published estimates of what the plant will cost vary. Nigerian and international trade coverage has put the figure at $3 billion. UTM has separately described a two-phase structure under which $2 billion was mobilised for the first phase through Afreximbank, with a further $3 billion earmarked for a second.

The Yoho field project

The facility will draw gas from the Yoho field in Oil Mining Lease 104, roughly 60 kilometres off the Niger Delta coast, offshore Akwa Ibom State, where UTM puts proven reserves at 2.2 trillion cubic feet. Design capacity is 1.8 million tonnes of LNG a year for export, alongside about 300,000 tonnes a year of liquefied petroleum gas earmarked for the Nigerian market, in a country that still imports cooking gas despite holding roughly 200 trillion cubic feet of proven gas reserves.

Work started in 2021. Pre-front-end engineering design was completed that year, and front-end engineering design was finished in October 2023 by JGC and Technip Energies, with KBR appointed as owner's engineer. The former Department of Petroleum Resources granted a Licence to Establish, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority issued a Licence to Construct in September 2024. The Nigerian Content Development and Monitoring Board approved the Nigerian Content Plan for the construction phase the same year.

Rone told an awards ceremony in Lagos in February that construction would begin during 2026. Current plans put first LNG shipments at 2030. The final investment decision has slipped more than once.

Ownership and financing

UTM Offshore holds 72 percent of UTM FLNG Limited. NNPC Limited holds 20 percent and the Delta State Government the remaining 8 percent, under a shareholders agreement the three parties signed to develop the plant.

Rone has run the UTM group of companies, which spans offshore services, dredging, engineering and construction, energy, properties and marine logistics, with operations in Nigeria and Ghana. He holds Nigeria's Order of the Federal Republic. He has said the project grew out of watching offshore gas either flared or reinjected rather than sold, and has framed UTM's involvement as an attempt to break the pattern under which Africa's existing floating LNG plants belong to international oil companies.

The venture carries considerable weight for the federal government's Decade of Gas programme, which targets higher domestic gas use by 2030. Bayo Ojulari, group chief executive of NNPC Limited, called the July agreement a step in shifting Nigeria from crude exports towards value-added gas products. Ekperikpe Ekpo, minister of state for petroleum resources with responsibility for gas, described it as evidence of investor confidence in the sector.

The Pan Niger Delta Forum said last week that concluding the long-term supply agreement removed the biggest obstacle to a final investment decision, and credited President Bola Tinubu with creating the conditions for it. Rone attributed the outcome to government policy on gas and said it showed what indigenous companies can do with political backing.

UTM has said the plant will employ at least 15,000 Nigerians across the six geopolitical zones once fully operational.

Whether the September target holds depends on the sales and purchase agreement closing first. Until a buyer signs for the cargoes, the decision cannot be taken.