Wedoany.com Report-Oct. 15, Shell has approved the development of the HI offshore gas project in Nigeria together with its joint venture partner Sunlink Energies, the company announced on Tuesday. The decision marks another major investment in Shell’s Nigerian operations and reflects its continued focus on expanding its global liquefied natural gas (LNG) portfolio.

A view shows a logo of Shell petrol station in South East London, Britain, February 2, 2023.

According to Shell, the HI project will have a peak production capacity of 350 million standard cubic feet of gas per day, which will be supplied to Nigeria LNG for processing and export to international markets. The investment, estimated at $2 billion by the Nigerian government, highlights Shell’s strategy to strengthen its LNG business and reinforce its presence in Nigeria following the sale of its onshore oil fields.

Nigeria LNG, the country’s largest gas liquefaction facility, is jointly owned by the Nigerian National Petroleum Company (NNPC) with a 49% stake, Shell holding 25.6%, TotalEnergies 15%, and Eni 10.4%. The HI gas field, discovered in 1985, is located about 50 kilometers offshore at a depth of approximately 100 meters. Production is expected to begin before the end of this decade.

The project is designed to contribute significantly to Nigeria’s energy output. Olu Verheijen, special adviser on energy to the Nigerian president, said: “It will add nearly one-third of the gas needed for the Nigeria LNG Train 7 project.” The development aligns with Shell’s global target to increase LNG volumes by an average of 4% to 5% annually through 2030.

Shell’s Nigerian subsidiary holds a 40% interest in the HI project, while Sunlink Energies owns the remaining 60%. The joint development aims to enhance gas supply stability for Nigeria LNG, supporting both domestic energy needs and export operations.

Industry observers note that the investment demonstrates Shell’s long-term commitment to Nigeria’s offshore energy sector, where it continues to focus on high-value gas and deepwater projects. The HI field’s contribution is expected to bolster Nigeria’s LNG capacity, helping to meet rising demand in global energy markets while also supporting local economic growth.

In a related development, Nigeria’s oil regulator last month approved a $510 million deal under which TotalEnergies agreed to sell its 12.5% interest in Oil Mining Lease 118, which includes the offshore Bonga oilfield, to Shell and Eni’s Agip. The transaction further consolidates Shell’s position among Nigeria’s leading offshore operators.

With the HI project moving forward, Shell and its partners aim to reinforce Nigeria’s role as a key LNG supplier to global markets. The project also aligns with the Nigerian government’s goal of attracting more international investment to develop the country’s natural gas resources and strengthen its energy infrastructure.