DPR authorises installation of FLNG unit at Yoho oilfield

Nigeria’s Department of Petroleum Resources (DPR) has reportedly authorised a contractor working for ExxonMobil (US) and Nigerian National Petroleum Corp. (NNPC) to install a floating LNG (FLNG) unit at the Yoho oilfield.

Templars, the Nigerian legal firm that has been serving as advisor for the FLNG project, said earlier this week that DPR had issued a licence to UTM, the Nigerian firm that has agreed to install the vessel for ExxonMobil and NNPC. UTM intends to provide an FLNG unit capable of turning out 1.2mn tonnes per year (tpy) of LNG, it noted.

After installation, the vessel is slated to process up to 176mn cubic feet (4.984mn cubic metres) per day of associated gas from the Yoho field. This will allow it to produce one or two standard-size LNG cargoes each month, Templars said.

According to the law firm, the Nigerian firm has not yet decided whether to charter an existing FLNG vessel or order a newbuild unit for the project. Most existing units have already been assigned to other projects, or were purpose-built for them; the PFLNG-1 and-2 vessels, for example, were built for Malaysia’s Kanowit project and are slated to remain there.

The only existing FLNG unit known to be available is a smaller vessel – the 500,000 tpy Tango LNG, which Argentina’s national oil company (NOC) YPF chartered in 2019 for installation near Buenos Aires. YPF declared force majeure on its contract with Exmar, the Belgian company that owns Tango LNG, in 2020, citing fallout from the coronavirus (COVID-19) pandemic. The vessel has been berthed in the Uruguayan port of Nueva Palmira ever since.

ExxonMobil and NNPC began development of the Yoho oilfield in 2003. They have been re-injecting associated gas back into the reservoir in order to maximise yields but are now looking to switch course, since the site is mature. The FLNG project will give the partners a means of commercialising the gas while they wind down oil extraction.

In the meantime, Yoho is still yielding about 35,000 barrels per day (bpd) of oil. ExxonMobil and NNPC are using a floating production, storage and off-loading (FPSO) to develop the offshore field.