(Reuters) -Shell has approved the development of an offshore gas project in Nigeria along with its joint venture partner Sunlink Energies, the oil major said on Tuesday, the latest in a series of investments by its Nigerian business.
The HI offshore gas project, once completed, will supply 350 million standard cubic feet of gas per day at peak production to Nigeria LNG, which produces and exports liquefied natural gas to global markets, Shell said.
The investment, valued at $2 billion according to the Nigerian government, underscores Shell’s strategy to expand its global LNG business and strengthen its position in Nigeria despite years of challenges and after it divested its Nigerian onshore fields that were beset by spills and theft.
State-run oil firm NNPC owns 49% of Nigeria LNG, with Shell, at 25.6%, the second-biggest shareholder. Other shareholders of the LNG terminal are TotalEnergies and Eni.
Production from the HI field, discovered in 1985 and located about 50 km (31 miles) offshore and 100 metres deep, is expected to begin before the end of this decade. It aligns with Shell’s plans to boost global LNG volumes by an average of 4% to 5% annually until 2030.
It will add nearly one-third of the gas needed for the Nigeria LNG Train 7 project, Olu Verheijen, special adviser on energy to the Nigerian president, said in a statement.
Shell’s Nigeria unit holds a 40% interest in the project, while Sunlink Energies owns 60%.
Last month, Nigeria’s oil regulator approved a $510 million deal by TotalEnergies to sell its entire 12.5% interest in oil mining lease 118, which hosts the offshore Bonga oilfield, to the field’s operators Shell and Eni’s Agip.
(Reporting by Yadarisa Shabong in Bengaluru, Shadia Nasralla and Isaac Anyaogu in Lagos; Editing by Rashmi Aich and Bernadette Baum)
