New FLNG project being considered in Nigeria

Seplat Energy is studying whether to deploy a floating liquefied natural gas vessel on a big Nigerian oil and gas field that it acquired from ExxonMobil in 2024.

The move reflects how floating LNG technology is beginning to gain traction in gas-rich Nigeria, with at least two other schemes already being assessed.

By the end of this year, UTM Offshore and its partners — which include state-owned NNPC — are set to take the final investment decision on the Yoho FLNG project in OML 104 offshore Delta State, which will have capacity of 2.14 million tonnes per annum.

Also off the coast of Delta state, Ace Gas & FLNG in 2024 picked China’s Wison New Energies to undertake design work on a potential 3 million tpa FLNG unit.

Seplat has a stake in OML 104 — but not the Yoho FLNG vessel — which it secured two years ago when it acquired MPNU, a subsidiary of ExxonMobil, for $1 billion.

That same acquisition also brought the London and Lagos-listed player operatorship of the big Oso field in shallow-water OML 70, which began production in the 1990s, where NNPC holds a 60% stake.

To date, the focus of attention at Oso has been to exploit its oil and condensate resources, with some of its associated gas piped to the Nigeria LNG plant on Bonny Island.

However, a source with direct knowledge of Seplat’s plans explained that significant volumes of Oso’s gas remain to be exploited which could either feed an FLNG facility or supplement existing supplies to NLNG.

“Oso is a massive gas condensate field. Over the years, it's produced more than 500 million barrels of oil... condensate. It's very dry [less liquids] now and is ready for [gas] blowdown,” the source said.

Blowdown is a term used to describe producing gas from a mature oilfield which had previously been reinjected to maintain reservoir pressure when oil production was the goal.

Seplat is currently supplying NLNG with 120 million cubic feet per day of gas, a volume which is set to double later this year.

Seplat is looking at its options for the remaining gas volumes, which could potentially amount to some 250 MMcfd— enough to support a 2 million tpa liquefaction vessel.

“That's either another pipeline to Nigeria LNG or a floating LNG solution,” said the well-placed source, stressing that “everything is on the table” and “a decision will be probably made later this year”.

If the FLNG solution is chosen, the source said Seplat would more likely go for a leased unit to be operated by a third party.

A separate Nigerian source confirmed that Seplat is in talks with various FLNG suppliers, with the vessel size and volume of feedstock gas still being worked on.

Seplat declined to comment.

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