Nigeria: Shell to build gas facility to supply Dangote fertilizer plant

Shell, the British oil and gas giant, announced on Monday its definitive commitment to financing a gas facility in Nigeria. The initiative is aimed at supplying a fertilizer plant, according to information provided to Reuters.

The company plans to supply 100 million standard cubic feet of gas daily from its Iseni field to Dangote's fertilizer and petrochemicals plant for a period of ten years. This arrangement is part of an agreement with Shell's joint venture partners, including TotalEnergies, Eni and the Nigerian National Petroleum Corporation (NNPC).

According to Osagie Okunbor, Shell's Country Manager for Nigeria, this agreement marks a key milestone for the development of the Iseni gas field, located in the Okpokunou cluster of oil lease 35 in oil-rich Bayelsa State. Okunbor stressed that the project would increase gas supply to local markets and boost economic growth in Nigeria, which has the largest gas reserves in Africa and ambitions to further develop these resources to boost both domestic and international supply.

The Dangote fertilizer plant, owned by Africa's richest man, Aliko Dangote, is the largest urea complex on the continent. At a cost of 2.5 billion dollars, with an annual production of three million tonnes and covering 65% of Nigeria's fertilizer needs, it plays a crucial role in fertilizer supply, both in Nigeria and in neighboring markets.

This news comes two weeks after Shell reached a $2.4 billion agreement to sell its onshore subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), to Renaissance Oil, a consortium of five companies. However, Shell said it would continue to support the management of SPDC's facilities, which supply gas to Nigeria LNG.

Shell's presence in Nigeria will remain significant even after this transaction. Its three core businesses, Shell Nigeria Exploration and Production Company (deepwater operations), Shell Nigeria Gas (gas supply to local industries and commercial customers) and Daystar Power Group (solar energy solutions in West Africa), will continue to operate.

In addition, Shell recently announced plans to expand its offshore activities in Nigeria, with a potential investment of $5 billion in offshore oil projects.

The company has also faced accusations of historic human rights abuses and environmental damage in Nigeria. In May 2023, a class action involving nearly 28,000 plaintiffs against Shell for an oil leak was dismissed, the trial having taken place well after the legal deadline for such claims.