African Export-Import Bank (Afreximbank) has agreed to partly finance activities designed for progressing UTM Offshore’s floating liquefied natural gas project (FLNG project) in Nigeria to bankability.

In this regard, the parties have signed a project preparation facility (PPF) financing head of terms.

UTM Offshore will handle the development, design, and construction of the FLNG project, which will have a nameplate production capacity of 1.2 million metric tons per annum. The project will also have a storage capacity of 200,000m3 and ancillary facilities.

To be located 60km from the shore of Akwa Ibom state, the FLNG facility is targeted to be completed in 2026. The plant will process 176 million standard cubic feet per day (MMscfd) of natural gas and condensate produced at the Yoho field.

Last year, the African-owned UTM Offshore signed a memorandum of understanding (MoU) with Afreximbank to raise $2bn for the first phase of the project. The parties agreed at that time to raise $3bn for developing the second phase.

Afreximbank executive vice-president Amr Kamel said: “The intervention by Afreximbank will help, Nigeria, one of its member states, to invest in natural gas as part of its pathway towards a just energy transition and achieve a more sustainable and climate resilient economic development.

“The holistic approach deployed by the Bank in the UTM project is a model that Afreximbank aims to replicate across its member countries. It is through such interventions that we can ignite transformative actions that will spur industrialisation and export development activities across the continent.”

Afreximbank said that the project preparation facility will be deployed during the pre-investment stage for de-risking the project and quickly advance it towards bankability.

Additionally, the bank will be appointed as mandated lead arranger (MLA) under the project preparation facility. It will lead in syndicating the debt raise and if necessary, will be able to incorporate credit enhancements.