Industrial hubs deepen gas utilisation with Shell’s 20-year pact

Hopes of industrial customers and manufacturing plants in Lagos and Ogun states deepening gas utilisation and further move off-grid have been boosted with a 20-year agreement with Shell Nigeria Gas (SNG), for the domestic distribution of gas to the hubs. Under the new deal with the Nigerian Gas Marketing Corporation (NGMC), SNG will also extend its distribution network to Badagry to serve a new market in the border community.

The deal comes six months after the firm completed the final phase of its 20km domestic gas pipeline expansion project in Abia State, connecting Agbor Hill, Osisioma and Araria industrial zones.

The project has also enabled the supply of pipeline gas to Ariaria Market Energy Solutions Limited, the Independent Power Project (IPP) consortium that provides electricity to the popular Ariaria market in Abia State. Ariaria International Market is one of the largest leather shoe-making and open stall markets in West Africa, with over 37,000 shops and an estimated one million traders.

With an adjustment in electricity tariff, local manufacturers had decried the proposal alluding to the lingering challenges in the real sector and poor quality of power supply, stating that operators spend an average of N70 billion on alternative energy to buffer poor electricity supply yearly.

Manufacturers have constantly decried the poor supply of electricity for production, driving the enormous spending on self-generated electricity up to about N70 billion, notwithstanding the billions of Naira spent on settling monthly electricity bills.

SNG’s Managing Director, Ed Ubong, said the new partnership would deepen domestic gas utilisation in Nigeria, and enhance further industrialisation in Agbara, Igbesa and Ota areas of Ogun State.

“This agreement will enable local industries to thrive and create employment opportunities for Nigerians. We look forward to continuing to grow domestic gas distribution to industries and manufacturing plants in Ogun State and other parts of Nigeria while unleashing the industrial potential of Badagry,” Ubong said. He acknowledged the support of the Nigerian Gas Company (NGC), and NGMC over the last 20 years in helping SNG to continue to provide gas to industries and manufacturing plants in Nigeria.

Managing Director of NGMC, Faruk Usman, said he was excited about the agreement, which he said would enable the parties to further unlock the potential of the domestic gas market and contribute to industrialisation in Nigeria.

Usman said: “We continue to work with credible partners to accelerate the marketing and distribution of natural gas to major industrial users in Nigeria in line with the vision of the Federal Government of Nigeria and the steers of the Group Managing Director of the Nigerian National Petroleum Corporation.”

Speaking on the long-term deal, Country Chair, Shell Companies in Nigeria, Osagie Okunbor, said the knock-on effects of the gas distribution agreement would bring “tremendous benefits to the economy” in SNG’s states of operation and Nigeria.

Okunbor added: “Shell companies in Nigeria will continue to turn Nigeria’s domestic gas opportunities into reality through our strategic intent to develop enough gas to meet our current commitments and future growth plans.”

SNG and its partners and local stakeholders have agreements to build infrastructure and deliver natural gas to over 150 industrial and commercial customers, mostly in Ogun, Abia, Oyo, Rivers, Bayelsa and Lagos States. The agreements drive industrialisation; provide employment for skilled and unskilled local population in addition to directly improving internally generated revenues in these states.