Shell Nigeria to Invest in Ajaokuta-Kano Gas Pipeline Project

A subsidiary of the Royal Dutch Shell Petroleum Development Company (SPDC), Shell Nigeria Gas Ltd (SNG) has indicated interest in expanding its investment in gas distribution.

In a meeting with the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, the multinational oil and gas firm revealed that it is interested in exploring investment opportunities available in the ongoing Ajaokuta-Kaduna-Kano (AKK) gas pipeline project.

The AKK gas pipeline which spans across different Northern Nigeria states covers a length of 614 kilometres. It runs from Ajaokuta to Kano. The pipeline, launched in June 2020, is a Trans-Nigeria Gas Pipeline (TNGP) and the Trans Saharan gas pipeline project.

According to the Nigerian National Petroleum Corporation (NNPC), the project, still under construction, is being built at an estimated $2.8 billion. After launching, the AKK gas pipeline is expected to distribute 2.2 billion square cubic feet of gas daily into the domestic market.

In his statement, the Managing Director of SNG, Mr. Ed Ubong said that the company already has a market where it distributes natural gas to industrial establishments. It also seeks to expand through the massive business opportunities Nigeria and the AKK gas pipeline project presents.

He said, “SNG currently distributes natural gas for power generation to industrial clusters around Ogun, Abia, Bayelsa, Rivers and Lagos States and we are currently exploring markets along the Ajaokuta-Kaduna-Kano pipeline project for investment opportunity to take gas to industries up north of Nigeria.”

Present at the meeting was also the General Manager, Shell Energy Nigeria, Mr. Markus Hector, who stated that the SNG plans to significantly expand its investment in gas distribution under the right regulatory environment.

According to him, the clear guidelines and regulations that support and protect investments were key in boosting investors confidence in the Nigerian gas sector.

Hector further commended the federal government for enacting the Petroleum Industry Act (PIA), saying that the act would support the growth of the gas industry in Nigeria.

Explaining the need Nigeria has for an accelerated gas infrastructure to deepen domestic gas distribution across Nigeria, the CEO of the NMDPRA, Farouk Ahmed hailed Shell Nigeria for its deliberate and active investment in growing the gas supply and distribution market. He stated that their investments and supply has helped power industries in key locations across Nigeria.

He uregd SNG to continue being transparent, responsible and to practice good corporate governance in its business dealings in the country.

According to Ahmed the federal government’s desire to see gas infrastructure development, especially in the midstream, necessitated the enactment of the PIA. The CEO vowed that NMDPRA would input the necessary regulations to make business favourable to SNG and other prospective investors, by encouraging healthy competition, competitive prices, flexibility of supply and investments in the gas sector.

Source: Investors King