Nigeria secures $2bn Shell offshore gas project, second major investment in 18 months

Nigeria has recorded another major milestone in its oil and gas sector as energy giant Shell announced a $2 billion investment in a new offshore gas development project in the country’s shallow waters.

The development, which follows a Final Investment Decision (FID) on the HI Field in Oil Mining Lease (OML) 144, is expected to deliver around 350 million standard cubic feet of gas per day (mmscf/d) from 2028 – nearly one-third of the gas required to power Nigeria LNG’s Train 7 project.

According to a statement from the State House on Tuesday, the investment brings total upstream oil and gas commitments secured under President Bola Tinubu’s administration to over $8 billion since May 2023, underscoring renewed global investor confidence in Nigeria’s energy sector.

The HI gas project is the third major oil and gas investment approved within the last 18 months, following the Ubeta Non-Associated Gas and Bonga North deepwater projects. Combined, the Ubeta and HI projects will provide up to 15 percent of NLNG’s total feedgas requirements across Trains 1 to 7.

Tinubu welcomed the announcement, describing it as “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 statement credited Nigeria’s growing investment momentum to the President’s energy-sector reforms, coordinated by the Office of the Special Adviser to the President on Energy, which introduced new fiscal incentives, regulatory clarity, and simplified approval processes.

“These reforms, now embedded in legislation, have restored investor confidence and repositioned Nigeria as a competitive investment destination,” the statement said.

The development of the HI field, first discovered in 1985, is being enabled by Presidential Directive 40, which introduced a competitive fiscal framework for Non-Associated Gas projects in onshore and shallow offshore fields.

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Special Adviser to the President on Energy, Olu Arowolo Verheijen, said the HI and Ubeta FIDs had secured the gas supply necessary to make NLNG Train 7 “not just possible, but transformative.”

“These projects will significantly strengthen the reliability of Nigeria’s LNG exports to global markets while expanding LPG supply for domestic use, reducing imports, boosting foreign exchange earnings, and advancing clean cooking access for millions of Nigerian households,” Verheijen said.

Shell’s Upstream President, Peter Costello, reaffirmed the company’s long-term commitment to Nigeria’s energy sector.

“Following recent investment decisions related to the Bonga deep-water development, today’s announcement demonstrates our continued commitment to Nigeria’s energy sector, with a focus on Deepwater and Integrated Gas,” Costello stated.

Boost for LNG capacity and job creation

The NLNG Train 7 project, which will expand the country’s liquefied natural gas production capacity by 8 million metric tonnes annually -a 35 percent increase – is expected to enhance Nigeria’s position in the global gas supply chain while supporting domestic gas use, job creation, and economic growth.

President Tinubu reiterated his administration’s determination to maintain an enabling environment for both domestic and foreign investors.

“This major FID announcement by Shell, their second in one year, is a clear validation of our wide-ranging reform efforts,” he said. “It shows the world that Nigeria is ready and open for business.”