Oyo State and Shell Nigeria Gas Ink 20-Year Deal to Develop RobustGas Infrastructure

Oyo State Government and Shell Nigeria Gas sign 20-year agreement to develop gas supply and distribution infrastructure across Oyo State. The project aims to deliver up to 60 million standard cubic feet of gas per day to industrial and commercial users.

author-image
Quadri Adejumo
New Update
Oyo State and Shell Nigeria Gas Ink 20-Year Deal to Develop RobustGas Infrastructure

Oyo State and Shell Nigeria Gas Ink 20-Year Deal to Develop RobustGas Infrastructure

Oyo State, Nigeria - The Oyo State Government and Shell Nigeria Gas (SNG) have signed a groundbreaking 20-year agreement to develop an extensive gas supply and distribution infrastructure across Oyo State. The project aims to deliver up to 60 million standard cubic feet of gas per day to industrial and commercial users throughout the state, with the potential to significantly boost economic activities and create job opportunities for local residents.

Why this matters: This agreement has the potential to transform the economic outlook of Oyo State and beyond, serving as a model for other states in Nigeria to leveragenatural gas for growth and development. The project's success could also contribute to Nigeria's goal of reducing its reliance on traditional energy sources and promoting cleaner energy solutions.

Under the terms of the agreement, SNG will be responsible for constructing and operating a gas distribution network in Oyo State for the next two decades. The initial phase of the project involves the construction of a 15-kilometer pipeline route, with plans for future expansion to meet the growing demand for natural gas in the state. The first gas is expected to flow through the pipeline by the fourth quarter of 2025.

At the signing ceremony, Oyo State Governor Seyi Makinde praised the project as a key catalyst for development, aligning with the state's strategic goals of promoting innovation and industrialization. "This project fits into our plan to drive innovation and industrialisation in Oyo State, and we're ready to partner with more companies and other organisations to enhance the delivery of relevant projects,"Makinde stated.

Ralph Gbobo, Managing Director of SNG, emphasized the transformative potential of the gas distribution project. "The gas distribution project will be a game-changer in the industrialization drive of the Oyo State Government, help boost internally generated revenue, and result in more job opportunities," Gbobo said. He further noted that the agreement marks a significant milestone for SNG and Oyo State in their efforts to promote economic growth and development in Nigeria.

The project is expected to provide industries and manufacturers in Oyo State with a more reliable, cost-efficient, and environmentally friendly energy source. By supplying natural gas to these key economic drivers, the agreement aims to attract new investments, stimulate industrial growth, and enhance the overall competitiveness of the state's economy.

Osagie Okunbor, Managing Director of The Shell Petroleum Development Company of Nigeria Ltd. and Chairman of Shell Companies in Nigeria, highlighted the importance of collaboration in driving progress. "This event points to the value of partnership as Shell continues to power progress in Nigeria through more and cleaner energy solutions for commercial and industrial customers," Okunbor remarked.

SNG, a fully Shell-owned company incorporated in 1998, has grown to become a dependable gas supplier, serving over 150 clients across Abia, Bayelsa, Ogun, and Rivers states. The company's expertise and track record in gas distribution make it a strong partner for the Oyo State Government in this ambitious endeavor.

The Oyo State-SNG gas infrastructure agreement comes at a time when the Nigerian government is actively promoting the use of natural gas as a cleaner and more efficient alternative to traditional energy sources. The Federal Government recently announced plans to stop granting licenses to gas companies that lack the capacity to build pipelines for gas distribution, in an effort to discourage the transportation of compressed natural gas by road.

As Oyo State embarks on this transformative path with Shell Nigeria Gas, the project's success could serve as a model for other states in Nigeria looking to leverage the power of natural gas to drive economic growth and development. The long-term commitment and substantial investment in gas infrastructure demonstrate the confidence of both parties in the potential of this partnership to create lasting positive impact in Oyo State and beyond.

Key Takeaways

  • Oyo State and Shell Nigeria Gas sign 20-year agreement for gas supply and distribution.
  • Project aims to deliver 60 million standard cubic feet of gas per day to industries and commercial users.
  • Initial phase involves 15-kilometer pipeline construction, with expansion plans for future growth.
  • Project expected to boost economic activities, create jobs, and promote cleaner energy solutions.
  • Success could serve as a model for other Nigerian states to leverage natural gas for growth and development.