By Fred Ojiegbe
In the first week of July, President Bola Ahmed Tinubu of Nigeria lent his support to the execution of a Floating Liquefied Natural Gas (FLNG) project in the country, which has been valued at $5 billion.
The multibillion-dollar floating gas facility, which is the first ever of its kind in Nigeria, is being developed by UTM FLNG, in partnership with TECHNIP Energies and Japan Gasoline Corporation (JGC).
While receiving the group of joint venture partners who have come together to build the groundbreaking energy infrastructure in the country, President Tinubu assured them that his government will give full support to the project because it perfectly fits into his programme to revive the Nigerian economy and provide more jobs to Nigerian citizens.
Julius Rone, who is the Group Managing Director (GMD) of UTM Floating Liquefied Natural Gas (FLNG), and who led the delegation to the Presidential Villa in Abuja, said a loan obtained from the African Export-Import Bank (Afreximb) is being used to finance the construction of the $5 billion multi-floating LNGs.
Speaking further, Rone noted that the project can produce 300,000 tons of Liquefied Petroleum Gas (LPG) per year and would also provide 7,000 direct jobs for Nigerians. He added that this will be the first time that an indigenous company would be involved in such a project that would contribute to this magnitude of the nation’s de-carbonization efforts. The FLNG project is expected to come on stream in the first quarter of 2026.
However, it is on record that the Nigerian National Petroleum Company (NNPC) Limited previously attempted a similar project on premium motor spirit (PMS), but it ran into serious operational challenges, resulting in a prolonged delay in takeoff.
It would be recalled that the concept of NNPCL to build Floating Mega Stations in the Niger Delta region of Nigeria was conceived and actualized through phased deployment from the year 2006 to 2009. The ultimate goal of this concept was to eliminate the perennial challenge faced by Nigerians who reside in coastal or riverine areas when it comes to accessing refined petroleum products.
Unfortunately, the volatile security situation in those coastal communities made it extremely challenging for NNPCL to fully achieve its set goals or targets in this regard, even after it had succeeded in citing the mega stations in six states, namely Cross River, Akwa Ibom, Rivers, Bayelsa, Delta and Ondo, with each of the states having two floating mega stations.
As recent as 2019, the retail arm of NNPCL continued to seek partnership with the Nigerian Navy on the security of its 12 Floating Mega Stations (FMS) across the Niger Delta for what it called effective service delivery, which indicated that for 13 years after the stations were built, services delivered by them were still not effective.
The genesis of the mega stations had its roots as far back as the year 2004 when Chief Olusegun Obasanjo, who was at that time the President of Nigeria, was on a visit to the Niger Delta and was confronted by the pitiable condition of the people of the region trying to obtain refined petroleum products from under-capacitated filling stations.
He then resolved to alleviate their sufferings by ensuring that petroleum products which are originally derived from their own land would no longer be in scarce quantities in the area. And by the next year in 2005, the Federal Government mandated NNPCL to fix the problem, and the idea of the floating mega stations was born.
One of such floating mega stations was inaugurated on October 4, 2006 at Okerenkoko in Warri South-West Local Government Area of Delta State ahead of 12 others, which were initially approved by the Federal Government. However, five years down the line in 2011, the laudable intentions were yet to bear fruits, with the riverine dwellers still traveling great distances up to the mainland to get fuel supplies.
With widespread complaints mounting at the time, NNPCL came out to debunk allegations that it had abandoned the project, blaming youth restiveness for the prolonged delay in bringing the project to life. It also said there were commercial activities in some of the mega stations, citing those in Calabar, Nembe and Ikang in Cross River, Bayelsa and Akwa Ibom States respectively which it said were in full operation, and that others were either awaiting maintenance or ready for test-run.
But this was almost six full years later after the facilities had been completed without much use, resulting in loss time and revenue running into billions of Naira, making one newspaper to describe the Okerenkoko facility in an article published in September 2010 as “NNPC’s floating mega station of waste.”
This clearly cast a dark shadow on the claim in October 2006 by George Marks, the then Managing Director of Julius Berger, that the mega stations constructed by the Company for NNPCL were ‘technological wonders,’ due to their failure to deliver commercial wonders as well, at least most of the time.
In April 2021, media reports claimed that some of these “technological wonders” still remain dilapidated and are lying idle as they quietly float in Niger Delta creeks and waterways. One of the examples cited was that of the Okerenkoko plant, which was the first-ever floating station to be launched in the country.
A story by Sahara Reporters quoted Williams Welemu, a resident of the community, as saying that “people go to town to buy petrol from filling stations and transport to the creeks,” despite the presence of floating mega stations. But these technological wonders cost the Federal Government between N700 million and N950 million to build, which makes it really wasteful that several of them have been out of commission for years.
Another of these mega stations is located in Burutu, also in Delta State, where Julius Pondi, who represented the community in the House of Representatives, was forced to address the Eighth Assembly, asking the Green Chamber to compel NNPCL to supply petrol to the floating mega stations.
Also, in 2017, an editorial by Delta-based news site, Gbaramatu Voice, claimed that the NNPC floating mega stations in the state functioned only between 2013 and 2015. By this account, it suggested that the first of the constructed floating mega stations worked only for two years from as far back as between October 4, 2006, and March 30, 2021.
With these realities in view, it is therefore hoped that the huge “waste” previously experienced by NNPCL with its floating mega stations in the Niger Delta must hold vital lessons to help UTM and its JV Partners to avoid any potential setback with their new project.