Shell exits domestic gas distribution in Nigeria

Shell has reduced its involvement in Nigeria's domestic gas distribution by selling its entire stake in Shell Nigeria Gas Group to a local company called Vaaris Energy Limited. This move marks the end of Shell's 25-year presence in supplying natural gas to industrial and commercial customers in parts of Nigeria.

Sale involves a long-standing Nigerian operation

The company being sold is Shell Nigeria Gas Limited (SNG), established in 1998. It operates a network of about 170 kilometers of gas pipelines in Ogun, Abia, and Rivers states, serving over 130 customers. However, Shell will remain active in Nigeria through its offshore and integrated gas projects.

Shell retains a key role in LNG production

Despite this exit from domestic distribution, Shell will keep a 25.6 percent stake in Nigeria LNG, which runs the Bonny Island liquefaction complex. This allows Shell to continue playing a role in the production and export of liquefied natural gas from Nigeria.

Recent history of strategic withdrawals

This sale follows Shell’s earlier exit from Nigeria, including the sale of its Nigerian subsidiary SPDC to Renaissance Africa Energy Company in March 2025 for $2.4 billion. That transaction transferred Shell’s 30 percent stake in a joint venture focused on onshore and shallow water assets.

New offshore gas project underway

In October 2025, Shell and Sunlink Energies approved the development of the HI gas project, located about 50 kilometers off the Nigerian coast. The project is expected to supply up to 350 million standard cubic feet of gas daily to Nigeria LNG, with production anticipated by the end of the decade.

Finalizing the sale and future challenges

The sale of SNG is not yet complete, and until it is finalized, the company will remain under Shell's control. Vaaris Energy now faces the task of developing the gas distribution network it will inherit, while Shell continues to balance its investments between domestic and offshore operations.