Nigeria's Gas Ambition Gets Boost as Shell Invests $2 Billion in HI Offshore Project

Strategic Insights -

The Nigerian government's efforts to leverage its vast gas reserves for economic growth received a significant boost as Shell announced a $2 billion investment in the HI offshore gas field (Oil Mining Lease 144). This project, expected to produce 350 million standard cubic feet of gas per day, is seen as a crucial step towards bridging the country's gas supply gap. With an output equivalent to nearly one-third of the gas required for the Nigeria Liquefied Natural Gas (NLNG) Train 7 project, experts say there will be more reliable feedstock for one of the nation's most strategic export assets.

Key Takeaways:

  • The HI gas development project will deliver 350 million standard cubic feet of gas per day, marking a significant step towards bridging Nigeria's gas supply gap.
  • The project's output is equivalent to nearly one-third of the gas required for the Nigeria Liquefied Natural Gas (NLNG) Train 7 project, ensuring reliable feedstock for a key export asset.
  • The project is expected to reduce the country's reliance on imported liquefied petroleum gas (LPG) and compressed natural gas (CNG), supporting local distribution and advancing cleaner cooking access for households.
  • Increased domestic gas availability will also strengthen Nigeria's push towards industrialisation, benefiting sectors such as manufacturing, power generation, and fertiliser production.
  • The successful closure of the HI project could pave the way for more Final Investment Decisions (FIDs) in the coming months, as Nigeria's gas reserves stand at a record high of 210.5 trillion cubic feet.
  • The total significant upstream investment commitments through FIDs in Nigeria's oil and gas sector since President Tinubu assumed office in 2023 have surpassed $8 billion.

Statistics:

  • $2 billion: The amount invested by Shell in the HI Offshore Gas Field (OML 144) project.
  • 350 million standard cubic feet per day: The expected output of the HI gas development project.
  • 210.5 trillion cubic feet: Nigeria's current gas reserves, making it one of the largest gas-producing nations in the world.
  • 22 million tonnes per annum: Nigeria's current LNG production capacity.
  • 30 million tonnes: Nigeria's expected LNG production capacity once NLNG Train 7 is operational.
  • $8 billion: The total upstream investment commitments through FIDs in Nigeria's oil and gas sector since President Tinubu's administration.

Sources:

  • [1] Bayo Onanuga, special adviser to the President on Information and Strategy. Quoted by Reuters.
  • [2] Olu Verheijen, special adviser to President Tinubu on Energy. Quoted by Reuters.
  • [3] Peter Costello, Shell's upstream president. Quoted by Reuters.
  • [4] Nigerian Upstream Petroleum Regulatory Commission (NUPRC). As cited by Reuters.