ABUJA, Sept 6 (Reuters) - Nigeria's oil regulator on

Friday granted UTM Offshore Limited the first license to operate

a floating liquefied natural gas plant, to tap flared gas from

an ExxonMobil ( XOM ) oil field in the Niger Delta.

Such plants are springing up on the continent as Africa

seeks to tap its gas resources. Nigeria has more than 209

trillion cubic feet of gas reserves, but loses over $1 billion

in annual revenue due to gas flaring, government estimates show.

The 2.8 million tons per annum (MTPA) floating vessel owned

by UTM will tap flared gas from ExxonMobil's ( XOM ) Oil Mining Lease

104 (Yoho field) in offshore Akwa Ibom, in southern Nigeria.

Farouk Ahmed, head of the Nigerian Midstream and Downstream

Petroleum Regulatory Authority (NMDPRA), said the plant's

capacity had been upgraded from 1.2 MTPA to 2.8 MTPA due to

growing LNG demand.

The engineering work will be completed in 2028, and

production will roll out in the first quarter of 2029, UTM

Offshore CEO Julius Rone said.

"This is just the engineering phase, and there are other

variables. So it is not possible to give you the cost, but it is

a multibillion dollar project."

The facility will deliver 500,000 metric tons of

liquefied petroleum gas for domestic market, while the LNG will

be exported, he noted.

Afreximbank provided $2.1 billion in financing the first

phase of construction and committed for $3 billion for the

second phase.