Shell Nigeria Exploration and Production Company Limited has cleared a final investment decision for the HI offshore gas project in partnership with Sunlink Energies and Resources Limited, signaling a renewed push into Nigeria’s deepwater sector. The project, located about 50 kilometers off the coast, will supply gas to Nigeria LNG’s Bonny Island terminal, expanding Shell’s feedstock base and reinforcing its LNG growth plans through 2030.
Once completed, the HI field is expected to supply up to 350 million standard cubic feet of gas per day—roughly 60,000 barrels of oil equivalent—at peak production. This gas will be sent to Nigeria LNG, the Bonny Island-based liquefied natural gas plant in which Shell holds a 25.6% equity interest. Shell confirmed that first gas is anticipated before the end of the decade, aligning with its broader upstream and LNG growth targets.
Shell’s Upstream President Peter Costello stated that this investment demonstrates Shell’s long-term commitment to Nigeria’s energy sector, particularly in deepwater and integrated gas. He added that the HI project is designed to help Shell grow its global LNG volumes while supporting Nigeria’s economic development goals.
How does the HI field development integrate with Nigeria LNG’s Train 7 and Shell’s global LNG ambitions?
The HI gas field development is expected to feed directly into the Nigeria LNG export system, reinforcing the resource base behind the ongoing Train 7 expansion. Train 7 is a major infrastructure upgrade at Bonny Island, designed to increase the terminal’s annual production capacity from 22 million tonnes per annum (mtpa) to approximately 30 mtpa. With LNG demand forecasted to grow across Asia and Europe, reliable upstream feedstock is critical to ensuring long-term contractual supply.
Shell has outlined its intention to grow LNG volumes by 4–5% per year through 2030. The HI project is part of this strategy and will be a key contributor to Shell’s stated goal of delivering over 1 million barrels of oil equivalent per day in new upstream and integrated gas production between 2025 and 2030. Nigeria’s deepwater gas fields, previously considered underutilized due to infrastructure constraints, are now being activated to meet both domestic and international demand.
The HI project complements Shell’s other recent investments in Nigeria, including the Bonga North development approved in December 2024 and the acquisition of an additional stake in the broader Bonga field. Together, these moves represent a renewed commitment by Shell to remain an active participant in Nigeria’s energy transition and monetization of natural gas resources.
What are the technical specifications and infrastructure layout of the HI gas development?
The HI gas field lies approximately 50 kilometers offshore in water depths of around 100 meters. Discovered in 1985, the field has been dormant for decades due to shifting priorities and lack of associated pipeline infrastructure. However, with the current push for cleaner transition fuels and LNG export growth, the field has regained commercial attractiveness.
The development plan includes a wellhead platform with four production wells. A multiphase pipeline will carry unprocessed gas from the offshore site to an onshore gas processing plant in Bonny. Once treated, the dry gas will be sent to Nigeria LNG while the associated condensate will be delivered to the Bonny Oil and Gas Export Terminal.
Shell estimates the HI field holds approximately 285 million barrels of oil equivalent (mmboe) in recoverable resources, based on a P50 classification under the Society of Petroleum Engineers’ Petroleum Resources Classification System. This means there is a 50% probability that actual volumes may be either higher or lower than this estimate. The figures provided represent 100% gross volumes, with Sunlink holding a 60% operating interest and Shell’s SNEPCo holding 40%.
The project’s production will be reported under Shell’s Upstream segment, indicating that its revenue contribution will not be captured under the Integrated Gas business line but will support Shell’s broader production goals.
What are the broader economic and industrial benefits of the HI gas project for Nigeria?
The HI project is more than just another deepwater gas field development—it is a strategic economic enabler for Nigeria. By feeding gas into Train 7 and reinforcing Nigeria’s LNG export capabilities, it helps the country increase foreign exchange earnings from LNG sales while creating local jobs and reducing gas flaring.
Shell has indicated that both construction and operational phases of the project will generate employment and support local contractors, aligning with Nigerian content development goals. This mirrors the local economic multipliers seen in earlier Nigeria LNG expansions, which generated thousands of jobs and downstream industrial activity.
Additionally, the HI project enhances Nigeria’s energy security by increasing the available gas pool that could, over time, support domestic power generation and industrial feedstock needs. While most of the gas is earmarked for export, policy provisions could eventually encourage dual-stream utilization, especially if infrastructure and pricing frameworks evolve in favor of domestic markets.
How have analysts and institutional investors reacted to Shell’s latest Nigeria-focused investment?
Investor sentiment around Shell’s Nigerian strategy appears broadly supportive. While country-specific risks such as regulatory uncertainty, sabotage, and oil theft remain, institutional investors see Shell’s deepwater and integrated gas moves as disciplined and commercially aligned. The HI project, in particular, is viewed as lower risk given its proximity to existing infrastructure, clear offtake pathways via Nigeria LNG, and Shell’s operating history in the region.
Shell plc (LON: SHEL) shares showed modest upward movement following the FID announcement, reflecting confidence in the long-term returns of the project. Analysts have noted that Shell’s upstream capital discipline, coupled with its focus on LNG assets that support energy transition narratives, continues to resonate with environmentally cautious investors.
Buy-side sentiment remains largely positive on Shell’s LNG strategy, particularly as LNG is increasingly being positioned as a medium-term decarbonization solution. It emits significantly less CO₂ than coal for power generation and has become a reliable substitute for petroleum products in transportation sectors, especially in Asia.
How does Shell’s integrated gas strategy in Nigeria compare to other global LNG expansion projects?
Nigeria offers Shell a unique value proposition among its global gas hubs. Unlike Qatar and Australia, where large-scale LNG projects face environmental permitting headwinds or cost inflation, Nigeria’s brownfield expansions through Train 7 and new upstream taps like HI offer scalability with lower incremental capex. This becomes especially critical as the company targets a 1% annual increase in combined upstream and gas output through 2030.
The HI project will likely rank among Shell’s most cost-efficient gas developments globally, especially as LNG demand continues to rise and long-term offtake contracts remain tight. Moreover, with European gas buyers seeking alternatives to Russian gas and Asian demand poised to grow with economic recovery, Nigeria’s strategic location provides Shell with logistical and geographic advantage.
Shell’s Nigerian LNG exports also support energy access goals across Sub-Saharan Africa, as some volumes may be reallocated regionally during energy shortages. This underlines the dual narrative of commercial returns and regional energy security—a story Shell has been eager to tell as part of its broader ESG narrative.
What are the future implications for Shell, Nigeria LNG, and the African gas value chain?
The HI gas project could set a precedent for monetizing other stranded gas fields across West Africa, particularly those discovered decades ago but left undeveloped. If successful, it could prompt additional investment not only from Shell but also from other international energy firms revisiting their Nigerian portfolios.
For Nigeria LNG, the new feedstock secures long-term supply and helps reduce concerns around resource depletion, particularly as new LNG buyers demand multi-decade commitments. In the long run, this may also encourage discussions around further expansion beyond Train 7.
Shell, for its part, is cementing its position as a long-term integrated gas player in Africa, combining upstream access with midstream and downstream export capabilities. The HI project may well become a flagship example of how legacy discoveries, when paired with modern infrastructure and a clear offtake model, can create meaningful value in today’s transition-focused energy market.
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