Golar points at MKII FLNG vessel for NNPC’s Yoho gas project

Sopuruchi Onwuka

Liquefied Natural Gas (LNG) facility developer, Golar LNG, is considering two floating liquefaction vessels for proposed development of the Yoho gas field in Nigeria.

The Yoho field is currently operated by ExxonMobil’s Mobil Producing Nigeria (MPN) Unlimited with 40 percent interest under a joint venture with the Nigerian National Petroleum Company (NNPC) Limited which holds overriding 60 percent stake in the alliance.

Weheres the NNPC is obviously driving the floating gas liquefaction venture with a new new local partner, it is not clear whether ExxonMobil would exercise its commercial interest in the new floating gas liquefaction following its traditional averseness to gas business in the country.

Golar stated in its financial and operating report that it is making progress with the development of a new floating LNG (FLNG) vessel in addition to existing vessel which would be out of contract in 2026.

The statement from Golar hints that the development plan for the Yoho FLNG may not reach commissioning and production stage until 2026.

The Oracle Today reports that MPN Unlimited remains the only major oil multinational joint venture operator in the country without any major gas monetisation project. Instead, the company reinjects produced gas for enhanced oil recovery, making the resource available for future use.

MPN has since 2003 produced the estimated 440 million barrels of oil reserves from the Yoho field in operated shallow water Oil Mining Lease (OML) 104, starting with early production system at 90,000 barrels per day and through full full field development and optimized production of some 150,000 barrels per day since 2006.

And in line with the ExxonMobil operating strategy, the gas from Yoho and Awawa reservoirs was reinjected to eliminate routine flaring and maximise oil recovery, creating the current opportunity for another player to explore commercialization of the gas resource.

The Yoho field has since given the investors its best returns, with production decling to about 35,000 barrels per day and ExxonMobil offering up its stake in the NNPC/MPN joint venture for sale.

With global demand for cleaner energy driving investment decisions, the Nigerian National Petroleum Company (NNPC) Limited which holds overriding 60 percent interest in the joint venture is working with a new partner, UTM Offshore, to drive a 1.2 million tons per annum (mtpa) offshore LNG venture.

With the support of NNPC, UTM has since secured a a licence to establish from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA); and the partners are working to install a 1.2 mtpa FLNG unit at the Yoho field.

The FLNG unit will have the capacity to process around 176mn ft³/d of gas from Yoho, which would be sufficient to produce about two standard-sized LNG cargoes a month.

Last April, the NNPC announced a memorandum of understanding (MoU) with Norwegian Golar LNG to build a floating LNG plant in Nigeria, a project that would enable the national oil firm deepen Nigeria’s domestic gas utilisation and enhance gas export.

Golar also declared in operational update that it has made strong progress on the Nigerian order for potential deployment of its FLNG vessels to various gas fields in the country.

It also disclosed that it further reached heads of terms with NNPC in August on an integrated contractual framework “for the joint development of specific gas fields towards potential FLNG projects,” hinting that the relevant fields could fully utilize FLNG Hilli following the end of its current contract in mid-2026, or utilize a MKII FLNG, Golar said.

The Oracle Today reports that whereas the liquefaction capacity of FLNG Hilli is not declared, Golar stated that the new build MKII FLNG vessel, probably named after Mele Kyari, would come with an annual capacity of 3.5 mtpa.

If the MKII FLNG is the consideration, then the vessel lays agenda for capacity expansion.

The Oracle Today reports that the UTM Offshore had in 2021 awarded the contract for the conceptual design of the FLNG development to JGC Corporation; and in late 2022, the consortium of JGC and Technip Energies secured the front-end engineering and design (FEED) contract with the completion date set for December 2023.

The African Export-Import Bank (Afreximbank) comes in with enormous $5 billion debt funding for the NNPC in support of the project.