Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell plc, together with Sunlink Energies and Resources Limited, have taken a final investment decision (FID) on the HI gas project offshore Nigeria.
Daily Trust reports that the decision involved the injection of $2 billion in the shallow offshore HI field in OML 144.
The project when completed will supply 350 million standard cubic feet (approximately 60 thousand barrels of oil equivalent) of gas per day at peak production to Nigeria LNG where Shell holds
Shell holds 25.6 per cent interest in NLNG, which produces and exports liquified natural gas to global markets.
Shell in a statement yesterday confirmed that the production is expected to begin before the end of this decade.
Daily Trust reports that this is coming after Shell earlier made an FID for the $5bn Bonga North Development project.
Speaking on the new FID, Shell’s Upstream President, Peter Costello said, “Following recent investment decisions related to the Bonga deep-water development, today’s announcement demonstrates our continued commitment to Nigeria’s energy sector, with a focus on Deepwater and Integrated Gas.
“This Upstream project will help Shell grow our leading Integrated Gas portfolio, while supporting Nigeria’s plans to become a more significant player in the global LNG market.”
Shell stated that the increase in feedstock to NLNG, via the Train 7 project that aims to expand the Bonny Island terminal’s production capacity, is in line with Shell’s plans to grow its global LNG volumes by an average of 4-5% per year until 2030.
It will also bolster NLNG’s contribution to Nigeria’s national economic development goals, including jobs in construction and operations.
The HI field was discovered in 1985 and lies in 100m of water depth around 50km from the shore. The current estimated recoverable resource volumes of the HI project are approximately 285 mmboe (million barrels of oil equivalent).
It would be recalled that Shell took a final investment decision on the Bonga North project in December 2024 and recently increased its stake in the Bonga field in line with the company’s intention to be a continued disciplined investor in Nigeria’s energy sector through its Deep Water and Integrated Gas businesses.
What to know about HI Project
The HI project is part of a joint venture between Sunlink Energies and Resources Limited (60%) and SNEPCo (40%).
The production associated with this project will be reported through Shell’s Upstream segment.
The project consists of a wellhead platform with four wells, to be installed at the HI field location, a pipeline to transport the multiphase gas to onshore at Bonny, and a gas processing plant at Bonny, from where the processed gas will be transported to NLNG and the condensate to the Bonny Oil and Gas Export Terminal.
The estimated peak production and current estimated recoverable resources presented above are 100% total gross figures while current estimated recoverable resource volumes are a P50 estimate under the Society of Petroleum Engineers’ Petroleum Resources Classification System.
P50 means there is a 50% probability of the estimate being lower and a 50% probability of being higher.
“This project contributes to Shell’s Capital Market Day 2025 commitment to deliver upstream and integrated gas projects coming on stream between 2025 to 2030 with a total peak production of more than 1 million barrels of oil equivalent per day (boe/d).
“This also supports Shell’s intent to grow top line production across our combined Upstream and Integrated Gas business by 1% per year to 2030,” it said.
Presidency hails decision
The Presidency has lauded Shell’s decision to commit $2 billion to the HI offshore gas development project in Nigeria, saying the project will elevate Nigeria’s gas output by supplying up to 350 million cubic feet of gas needed for economic activities.
The Presidency also disclosed that Nigeria has attracted over $8 billion in new investments in the oil and gas sector within the first two years of President Bola Tinubu’s administration.
Presidential spokesman Bayo Onanuga, described Shell’s latest FID as another endorsement of the Tinubu government’s economic and energy sector reforms.
Reacting to this, Tinubu stated, “This major FID announcement by Shell, their second in one year, is a clear validation of our wide-ranging reform efforts and a signal to the world that Nigeria is fully open for business and investment.”
According to the statement, the HI project marks the third major Final Investment Decision in Nigeria’s oil and gas sector since Tinubu assumed office in 2023.
It further said that the projects, including the Ubeta and Bonga North developments, together have brought total new investments in the sector to over $8 billion since Tinubu assumed office.
“This investment decision is Nigeria’s third major oil and gas FID in the last 18 months, following the Ubeta Non-Associated Gas project and the Bonga North deepwater project. It marks yet another milestone in Nigeria’s journey to unlock its abundant gas resources for domestic and export use. The Ubeta and HI gas projects can supply up to 15 per cent of the NLNG’s total feed gas requirements, covering Trains 1 to 7,” the statement noted.