Shell Greenlights $2 Billion Offshore Gas Venture in Nigeria with Sunlink
Shell has given the green light to a significant $2 billion offshore gas venture in Nigeria, partnering with Sunlink Energies. This initiative is a crucial part of Shell’s strategy to enhance its liquefied natural gas (LNG) production amid ongoing challenges in the region.
Overview of the HI Offshore Gas Project
The HI offshore gas project is set to supply 350 million standard cubic feet of gas per day at peak production levels. This supply will primarily support the Nigeria LNG Project, which is a key player in the global LNG market.
Key Project Details
- Location: 50 km offshore Nigeria at a depth of 100 meters.
- Production Start: Expected before the end of the decade.
- Ownership Structure:
- Shell: 40% interest
- Sunlink Energies: 60% interest
- Partner Stake: Nigeria’s state oil corporation, NNPC, holds a 49% interest in Nigeria LNG.
Strategic Importance of the Investment
This investment marks a significant step in Shell’s plans to expand its global LNG production by 4% to 5% annually until 2030. It aims to bolster Shell’s position in Nigeria after divesting from onshore fields plagued by operational challenges such as spills and theft.
The HI offshore gas field was discovered in 1985 and aligns with Shell’s ongoing efforts to tap into Nigeria’s substantial gas resources. It is expected to contribute nearly one-third of the gas requirement for Nigeria LNG’s Train 7 project, as highlighted by Olu Verheijen, the energy adviser to the Nigerian president.
Recent Developments in Nigeria’s Oil Sector
This announcement follows a recent decision by Nigeria’s oil regulator to approve TotalEnergies’ $510 million sale of its 12.5% stake in oil mining lease 118. This lease is home to the offshore Bonga oilfield, which is operated by Shell and Eni’s Agip.
The HI project emphasizes the importance of partnerships in advancing Nigeria’s energy production capabilities. It reflects Shell’s commitment to investing in LNG, positioning itself favorably within the industry despite past adversities.
