Page 10 - GLNG Week 28 2022

GLNG AFRICA GLNG

Afreximbank to provide partial financing

for UTM Offshore’s FLNG project

INVESTMENT THE African Export-Import Bank (Afrex- de-risk the FLNG scheme and help it make rapid
imbank) revealed on July 7 that it had agreed to progress toward bankability.
work with Nigeria’s UTM Offshore to cover part Additionally, it hailed the ground-breaking
of the cost of a floating LNG (FLNG) project. nature of the project. It said in its statement that
In a statement, Afreximbank said that it had the initiative had “historical significance, as it
signed a heads of terms (HoT) document with is the first FLNG project developed by an Afri-
UTM Offshore, which is leading the project can-owned company on the continent.”
in co-operation with LNG Investment Man- Afreximbank went on to say that it was pro-
agement Services, a unit of Nigerian National viding support for UTM Offshore’s plan to build
Petroleum Co. Ltd (NNPC Ltd). Under this doc- an FLNG vessel with a single production train
ument, the bank will be able to carry out project capable of turning out 1.2mn tonnes per year
preparation facility financing (PPF) operations, (tpy) of LNG and a storage capacity of 200,000
it noted. cubic metres. It did not comment on the Nige-
The bank did not disclose the exact value of rian company’s statements earlier this year that
the deal or say how much it intended to lend the partners had decided to build the ship with a
UTM Offshore for the FLNG project. Instead, larger production capacity of 1.52mn tpy.
it explained that it had agreed to provide partial According to previous reports, UTM Off-
financing for the initiative and would lead the shore will be installing the FLNG vessel for
process of raising the rest of the money needed ExxonMobil (US) and NNPC Ltd, the two share-
to cover costs, which are expected to total $5bn, holders in the Yoho oilfield, which lies within
or $2bn in the first phase of financing and $3bn the OML 104 licence area. ExxonMobil and its
in the second phase. state-owned partner began extracting crude
“[Under] the PPF, the Bank will be appointed from Yoho in 2003 and have been flaring asso-
as mandated lead arranger (MLA) and lead in ciated gas or re-injecting it into the reservoir to
syndicating the debt raise – with the ability to maximise oil output. Now that the site is mature,
incorporate credit enhancements, if required,” however, they see the FLNG project as a means of
Afreximbank said in its statement. “Through its changing course and commercialising the field’s
financial advisory mandate, Afreximbank has gas as oil yields decline.
been playing an instrumental role in structuring As of last year, Yoho was still yielding about
the transaction to ensure optimal returns and 35,000 barrels per day (bpd) of oil. ExxonMobil
debt sizing, as well as identifying equity inves- and NNPC Ltd have been using a floating pro-
tors to invest in the project on favourable terms.” duction, storage and off-loading (FPSO) vessel to
The bank did not say whether any specific develop the offshore site. Presumably the FLNG
lenders were ready to commit to the project. It vessel will be installed near the FPSO, at a site
did stress, though, that during the pre-invest- about 60 km off the coast of Akwa Ibom State.™
ment stage, it would deploy the PPF in order to

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