Nigeria’s ambition to transform its vast gas reserves into a driver of economic growth received a major boost today as Shell announced a $2 billion investment in the HI offshore gas field (Oil Mining Lease 144).
The project, which will deliver 350 million standard cubic feet of gas per day (mmscf/d), signals growing confidence in the country’s energy reforms under President Bola Tinubu’s administration and could play a crucial role in strengthening both export and domestic gas supply.
A critical addition to Nigeria’s gas infrastructure
The HI gas development represents a step towards bridging Nigeria’s gas supply gap. With an output equivalent to nearly one-third of the gas required for the Nigeria Liquefied Natural Gas (NLNG) Train 7 project, it will help ensure more reliable feedstock for one of the nation’s most strategic export assets.
NLNG Train 7, currently under construction, is expected to expand Nigeria’s LNG production capacity from 22 million tonnes per annum to about 30 million tonnes once operational.
By supporting NLNG’s feedstock needs, the HI project will help maintain Nigeria’s relevance in global LNG markets at a time when demand for cleaner fuels is rising and competition for supply is intensifying.
More consistent LNG exports will translate into increased foreign exchange earnings, critical for stabilising the naira and supporting government revenue.
Read also: Shell greenlights $2bn offshore gas project to bolster Nigeria’s LNG ambitions
Boost for domestic energy access
Beyond exports, the project has implications for Nigeria’s domestic energy landscape. A share of the gas from OML 144 is expected to feed into the domestic network, expanding the supply of liquefied petroleum gas (LPG) and compressed natural gas (CNG).
This could reduce the country’s reliance on imported LPG, support local distribution, and accelerate the adoption of cleaner cooking fuels among households, one of the government’s key clean energy priorities.
Increased domestic gas availability also strengthens Nigeria’s push toward industrialisation. Sectors such as manufacturing, power generation, and fertiliser production, often hampered by unreliable energy supply, stand to benefit from new gas inflows.
Renewed investor confidence under Tinubu
The HI offshore project marks the third major Final Investment Decision (FID) secured in less than two years under President Tinubu, following Shell’s Ubeta gas project and TotalEnergies’ Bonga North deepwater development.
Together, these deals represent more than $8 billion in upstream commitments since mid-2023, a turnaround in investor sentiment after years of uncertainty triggered by policy inconsistencies and delayed reforms.
The government’s recent fiscal and regulatory adjustments under the Petroleum Industry Act (PIA), along with efforts to streamline project approvals and improve contract terms, appear to be paying off.
According to Olu Verheijen, the president’s energy adviser, these initiatives are “restoring investor confidence and repositioning Nigeria as a competitive global investment destination.”
Read also: NUPRC greenlights TotalEnergies’ $510m deal with Shell, Agip
Laying the groundwork for more deals
The successful closure of the HI project could pave the way for more Final Investment Decisions in the coming months.
The country’s gas reserves stand at a record high of 210.5 trillion cubic feet, according to Gbenga Komolafe, chief executive officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), putting Nigeria among the largest in the world, but it has struggled for decades to convert this potential into tangible economic value.
With the right fiscal incentives and infrastructure investments, analysts believe Nigeria could become a leading gas hub in Africa, supplying both local industries and export markets.
The government’s declared ambition to achieve “Decade of Gas” targets, focusing on gas-to-power, gas-based industries, and clean energy transition, relies heavily on projects like this.
