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Shell lights up Lagos, inks $300m gas saturation understanding with firm

Indications that crash of high price and associated scarcity of natural gas around Lagos have emerged as Royal Dutch Shell has sealed a deal with Shoreline Energy Group to develop, market and distribute the product across the state.

The agreement, valued at $300 million, can be described as the latest example of global energy groups investing in terminals, pipelines and power infrastructure around Africa as a way of promoting gas as the best solution to the continent’s chronic shortage of electricity-generating capacity.

Specifics of the deal showed that Shell will help finance and develop a transmission and distribution pipeline network to generate revenues from a 20-year gas concession, originally owned by Gasland Company, in which Shoreline took a 75 percent stake in 2015.

Explaining more on the deal, general manager for gas at Shell’s Nigerian subsidiary, Philip Mshelbila, said the agreement will be officially unveiled within days for effective takeoff, saying it is “an important next step in the expansion of the Nigerian domestic gas market”.

Since recently, oil and gas groups had begin to see Africa and particularly, Nigeria as an important part of their global efforts to drive demand for gas as a cleaner and more efficient alternative to coal, diesel and fuel oil in power generation, transport and industrial processes.

Only recently, Total and the NNPC also sealed related deal that will deepen the trucking of gas to power plants and homes as a way of growing efficiency in gas utilization.

Also recently, Eni of Italy has flagged off massive investment in a gas terminal and pipeline to connect newly developed gas resources off the coast of Ghana to the local market and Total of France is building a floating gas storage facility off Ivory Coast.

Analysts say the observed glut in gas investment stemmed from the fact that gas usage and renewable energy regime is becoming the new trend in energy efficiency.

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