Shell invests $2bn in new offshore gas project in Nigeria

Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell plc, says it has taken a final investment decision (FID) on the HI offshore gas project in the country.

The decision, taken in partnership with Sunlink Energies and Resources Limited, saw the injection of $2 billion in the shallow offshore HI field in OML 144.

The HI project, according to a statement on Tuesday, is part of a joint venture between Sunlink (60 percent) and SNEPCo (40 percent).

The HI field was discovered in 1985 and lies at a depth of 100 metres, around 50 kilometres from the shore.

Shell said the current estimated recoverable resource volumes of the HI project are approximately 285 mmboe (million barrels of oil equivalent).

When completed, the project is expected to supply 350 million standard cubic feet (mscf) — approximately 60 thousand barrels of oil equivalent — of gas per day at peak production to “Nigeria LNG (NLNG; Shell interest 25.6%), which produces and exports liquefied natural gas (LNG) to global markets”.

“Production is expected to begin before the end of this decade,” Shell said.

The British oil giant said the increase in feedstock to NLNG, via the Train 7 project that aims to expand the Bonny Island terminal’s production capacity, is in line with its plans to grow its global LNG volumes by an average of 4 percent to 5 percent annually until 2030.

This, the company said, will also bolster the NLNG’s contribution to Nigeria’s national economic development goals, including jobs in construction and operations.

Speaking on the latest FID, Peter Costello, Shell’s upstream president, said the move demonstrates the oil major’s continued commitment to Nigeria’s energy sector, with a focus on deepwater and integrated gas.

“This Upstream project will help Shell grow our leading Integrated Gas portfolio, while supporting Nigeria’s plans to become a more significant player in the global LNG market,” Costello was quoted as saying.

In December 2024, SNEPCo announced a final investment decision (FID) on Bonga north, a deepwater project off the coast of Nigeria.

Reacting to the development in a statement on Tuesday, President Bola Tinubu welcomed Shell’s fresh investment, describing it as a validation of his reforms.

“This major FID announcement by Shell, their second in one year, is a clear validation of our wide-ranging reform efforts and a signal to the world that Nigeria is fully open for business and investment”, the president was quoted as saying.

Tinubu, according to Bayo Onanuga, his special adviser on information and strategy, reiterated his administration’s commitment to creating an enabling environment for Nigeria’s domestic and foreign investors.