Shell PLC on Tuesday confirmed it plans to move ahead with a liquefied natural gas project offshore Nigeria that is expected to begin production by 2030.
The London-based oil and gas major said Shell Nigeria Exploration & Production Co Ltd has taken a final investment decision in the HI project, a joint venture with Lagos-based Sunlink Energies & Resources Ltd.
SnepCo owns 40% of the project and Sunlike 60%. Production from HI will be recorded as Upstream revenue within Shell accounts, with the field containing a recoverable estimate of 285 million barrels of oil equivalent, according to Shell.
At peak output, HI aims to supply 350 million standard cubic feet of gas per day, which is around 60,000 barrels of oil equivalent. This will go to Nigeria LNG Ltd, a joint venture in which Shell owns 25.6% interest, which will then produce and export the gas to global markets.
The feedstock will be sent via the Train 7 project, where Shell is also looking to upscale production at its Bonny Island terminal. Shell said this aligns with the target range of 4% to 5% annual growth in LNG volumes up to 2030.
The HI decision comes after SnepCo in May bought a stake in the Bonga oil field offshore Nigeria from French peer TotalEnergies EP. The purchase increased Shell’s portion of the Bonga production sharing contract to 67.5% from 55.0%. Like HI, Bonga aims to start production by the end of the decade.
Peter Costello, president of the Upstream division commented on Tuesday: ‘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 added that HI grows Shell’s integrated gas portfolio, ‘while supporting Nigeria’s plans to become a more significant player in the global LNG market’.
Shell shares were down 0.4% to 2,685.00 pence on Tuesday morning in London.
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