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Shell signs $100 million agreement with Oyo Govt to build gas distribution network across state 

The Oyo State Government and Shell Nigeria Gas (SNG) have signed an agreement worth over $100 million to develop a gas supply and distribution infrastructure that will deliver gas to industrial and commercial users in the state.

A statement released on Friday by Shell Nigeria’s Media Relations Manager, Abimbola Essien-Nelson, disclosed that SNG will build and operate the gas distribution network which will serve customers across Oyo State for 20 years.

According to the statement, the project will start with the construction of gas distribution infrastructure along a 15km pipeline route, adding that it will grow to deliver up to 60 million standard cubic feet of gas per day across the state.

On his part, the Managing Director SNG, Ralph Gbobo, said the agreement was a significant milestone for SNG and Oyo State to boost economic activities in Nigeria by supplying industries and manufacturers with natural gas, a more reliable, cost-efficient and environmentally friendly source of energy.

  • “The gas distribution project will be a game-changer in the industrialization drive of the Oyo State Government and help boost internally generated revenue and result in more job opportunities.
  • “For SNG the project is a milestone in our effort to continue growing the energy supply to businesses in Nigeria in line with Nigeria’s ambition to drive progress on the back of natural gas availability across Nigeria under the Decade of Gas initiative,”

What the Governor Said

Moreover, Seyi Makinde, the governor of Oyo State, wrote on his X account that the deal was signed in London, adding that the project worth about $100 million.

He said the project also involves the construction of a Pressure Reduction and Metering Station (PRMS) and laying of pipelines by SNG on a Build-Own-Operate-Transfer (BOOT) basis.

  • “We were in London to sign the final investment agreement for the Oyo State Government-Shell Nigeria Gas Infrastructure Development and Distribution project.
  • “This gas project worth about $100 million, involves the construction of a Pressure Reduction and Metering Station (PRMS) and laying of pipelines by SNG on a Build-Own-Operate-Transfer (BOOT) basis. Ownership will be transferred to Oyo State after 20 years.
  • “With this agreement in place, we are looking forward to the first flow of gas to industrial, manufacturing and commercial entities as well as our independent power project in Oyo State in 18 months,” Makinde added.

More Insights

In addition, the managing Director of the Shell Petroleum Development Company of Nigeria Ltd and Chairman, Shell Companies in Nigeria, Osagie Okunbor said:

  • “This event points to the value of partnership as Shell continues to power progress in Nigeria through more and cleaner energy solutions for commercial and industrial customers.
  • “Building on our presence in the country since the 1960s and the wide marketing and trading reach of Shell Energy, we are excited about developing gas distribution solutions and delivering competitive and reliable energy for power generation and industrial use across Nigeria,” he said.

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