Shell Announces Plans to Construct Gas Facility in Nigeria to Supply Fertilizer Plant
The gas facility is slated to provide 100 million standard cubic feet of gas per day from the Iseni field to the Dangote Fertiliser and Petrochemical plant.
British oil and gas giant Shell has officially approved the development of a gas facility in Nigeria aimed at supplying a fertilizer plant, as confirmed by the company to Reuters on Monday.
Under the terms of the agreement reached between Shell and its partners in the joint venture, TotalEnergies, Eni, and the Nigerian state-owned oil company NNPC, the facility will deliver 100 million standard cubic feet of gas per day from the Iseni field to the Dangote Fertiliser and Petrochemical plant for ten years.
According to Osagie Okunbor, Shell’s Nigeria chief, this agreement represents a significant milestone in the advancement of the gas-rich Iseni field, which is part of the Okpokunou Cluster located in Oil Mining Lease 35 in Bayelsa state, known for its abundant oil reserves.
Okunbor emphasized that beyond serving the fertilizer plant, the project is expected to contribute to the increased availability of gas in domestic markets and thereby stimulate economic growth. Nigeria, holding the largest gas reserves in Africa, is keen on further developing its gas resources to bolster both domestic and international supply.
The fertilizer plant, owned by Africa’s wealthiest individual Aliko Dangote, is valued at $2.5 billion and is touted as the continent’s largest urea complex, with an annual output capacity of three million tonnes. It plays a pivotal role in meeting 65% of Nigeria’s fertilizer demand and also caters to significant markets within the sub-region.
The announcement regarding the development of the gas facility in Nigeria by Shell comes just two weeks after the company finalized a $2.4 billion deal to divest its onshore business, Shell Petroleum Development Company of Nigeria (SPDC), to Renaissance Oil, a consortium consisting of five companies. Despite this divestment, Shell affirmed its commitment to supporting the management of SPDC joint venture facilities that supply feed gas to Nigeria LNG.
Even with this divestment, Shell’s presence in Nigeria will remain robust. The company’s three other businesses will continue operations: Shell Nigeria Exploration and Production Company, which operates in the deepwater Gulf of Guinea; Shell Nigeria Gas, which supplies gas to local industries and commercial customers; and Daystar Power Group, involved in providing solar power solutions across West Africa.
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In addition, Shell unveiled plans last December to expand its offshore activities in Nigeria, potentially investing up to $5 billion in offshore oil projects.
However, Shell has faced allegations of historical human rights abuses and environmental damage in Nigeria. Despite these challenges, a class action lawsuit filed by nearly 28,000 individuals against Shell for an oil leak was dismissed in May 2023 due to the lawsuit being filed years after the legal deadline for complaints.
