Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell plc, has taken a final investment decision (FID) on a new $2 billion gas project in offshore HI Field, in OML 144.
The investment was done in partnership with Sunlink Energies and Resources Limited. The HI project is part of a joint venture between Sunlink Energies and Resources Limited (60 per cent) and SNEPCo (40 per cent).
In a statement released Tuesday, October 14, Shell said that when completed, the new Non-Associated Gas (NAG) development project will supply 350 million standard cubic feet of gas per day (mmscf/d) at peak production. It said the supply will be made to Nigeria Liquefied Natural Gas (NLNG), which produces and exports LNG to global market. Shell has 25.6 per cent interest in NLNG.
The British energy giant said production is expected to begin before the end of the decade.
The HI field, which was discovered in 1985, lies in 100 metres of water depth around 50 kilometre from the shore.
Shell said the current estimated recoverable resource volumes of the HI project are approximately 285 mmboe (million barrels of oil equivalent).
Commenting on the deal, Peter Costello, Shell’s Upstream President said the latest investment decision which is also related to the Bonga deep-water development, demonstrates their 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 added.
The statement said the increase in feedstock to NLNG, through the Train 7 project that aims to expand the Bonny Island terminal’s production capacity, is in line with Shell’s plans to grow its global LNG volumes by an average of 4-5 per cent per year until 2030.
The oil multinational further stated that “It will also bolster NLNG’s contribution to Nigeria’s national economic development goals, including jobs in construction and operations.”
Justifying the investment decision, the company stated that LNG plays a key role in the energy transition as it produces less greenhouse gas emissions than coal when used to generate electricity, and less emissions than petrol or diesel when used for transport fuel.
Pinnacle Daily recalls that Shell had in December 2024, taken a final investment decision on the Bonga North, a deepwater project in Nigeria. On May 28, SNEPco signed an agreement with TotalEnergies EP Nigeria Limited to acquire its 12.5 per cent stake in the OML 118 Production Sharing Contract (OML 118 PSC), an oil mining lease offshore Nigeria that includes the Bonga field. This increased Shell’s stake in the Bonga field.
It said the acquisition is “consistent with the company’s intention to be a continued disciplined investor in Nigeria’s energy sector through its Deep Water and Integrated Gas businesses.”
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Giving further details of the latest offshore gas project, Shell said: “it consists of a wellhead platform with four wells, to be installed at the HI field location, a pipeline to transport the multiphase gas to onshore at Bonny, and a gas processing plant at Bonny, from where the processed gas will be transported to NLNG and the condensate to the Bonny Oil and Gas Export Terminal.”
Tinubu Welcomes H1 Gas Project Investment
Reacting to the development, Nigeria’s President Bola Tinubu expressed delight in the new gas project, saying it marks the second major gas investment in 18 months in the country.
A statement signed by Special Adviser to the President, on Information & Strategy, Bayo Onanuga, said the latest FID brings total upstream investment commitments in Nigeria’s oil and gas sector to over $8 billion since President Tinubu assumed office in 2023.
Onanuga said the outcome underscores the success of the Tinubu administration’s reform agenda and the renewed confidence of global investors.
“This investment decision is Nigeria’s third major oil and gas FID in the last 18 months, following the Ubeta Non-Associated Gas project and the Bonga North deepwater project,” Onanuga stated. “It marks yet another milestone in Nigeria’s journey to unlock its abundant gas resources for domestic and export use. The Ubeta and HI gas projects can supply up to 15 percent of the NLNG’s total feedgas requirements, covering Trains 1 to 7.”
He said that since 2024, the administration has carried out reforms in the oil and gas industry through presidential directives and legislation aimed at boosting oil and gas production. “These directives have introduced unprecedented fiscal incentives, regulatory clarity, operating process simplification, cutting contracting costs, and reducing approval cycle times,” the presidency noted.
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“The three landmark FIDs—the HI and Ubeta gas projects, and Bonga North deepwater—represent blueprint projects selected and unlocked by the Federal Government to drive the implementation of the presidential directives. Specifically, the development of the HI gas field—discovered four decades ago, in 1985—is being enabled by Presidential Directive 40, which introduced a competitive fiscal framework for Non-Associated Gas in onshore and shallow offshore fields.”
The statement quoted Special Adviser to President Tinubu on Energy, Olu Arowolo Verheijen, saying that with the Ubeta FID and now the HI FID, Nigeria has secured the gas supply needed to make NLNG Train 7 possible.
Verheijen said the projects would strengthen the country’s capacity for LNG exports and LPG supply for domestic use, while reducing imports and boosting foreign exchange earnings.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
