Shell’s presence in Nigeria will remain significant. Credit: Jethro Carullo via Unsplash.

British oil and gas giant Shell has made a final investment decision to develop a gas facility in Nigeria to supply a fertiliser plant, the company told Reuters on Monday.

The facility will supply 100 million standard cubic feet of gas per day from the Iseni field to the Dangote Fertiliser and Petrochemical plant for ten years, according to a deal agreed between Shell and its partners in the joint venture, TotalEnergies, Eni and Nigerian state-owned oil company NNPC.

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“The agreement is a critical step in pursuing the development of the gas-rich Iseni field, which is part of the Okpokunou Cluster in Oil Mining Lease 35” in the oil-rich Bayelsa state, Shell’s Nigeria chief Osagie Okunbor told Reuters.

He added that the project will also help increase the delivery of gas to domestic markets and stimulate economic growth. Nigeria currently holds the biggest gas reserves in Africa and is looking to develop these further to boost domestic and international supply.

Owned by Africa’s richest man Aliko Dangote, the $2.5bn fertiliser plant is the continent’s largest urea complex with an annual output of three million tonnes and accounts for 65% of Nigeria’s fertiliser demand. It also supplies major markets in the sub-region.

The announcement comes two weeks after Shell signed a $2.4bn deal to sell its onshore business Shell Petroleum Development Company of Nigeria (SPDC) to Renaissance Oil, a consortium of five companies, though Shell said it will continue to support the management of SPDC joint venture facilities that supply feed gas to Nigeria LNG.

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However, the company’s presence will remain strong in the African nation after the deal goes through. Its three businesses will remain active, namely Shell Nigeria Exploration and Production Company, which operates in the deepwater Gulf of Guinea; Shell Nigeria Gas, which supplies gas to local industries and commercial customers; and Daystar Power Group, which is engaged in offering solar power solutions across West Africa.

Last December, Shell also announced plans to expand its offshore presence in Nigeria with a potential $5bn investment in offshore oil projects.

The company has also recently faced allegations of historic human rights abuse and environmental harm in Nigeria, although, in May 2023, a class action that saw nearly 28,000 individuals sue Shell for an oil leak was thrown out because the lawsuit came years after the legal deadline for complaints.