Shell sells its gas business in Nigeria to Vaaris Energy

British energy company Shell has signed a deal to sell its interest in Shell Nigeria Gas Group to Vaaris Energy Limited, a Nigerian energy firm. This move is part of Shell's plan to leave Nigeria’s domestic gas distribution business.

Shell made the announcement on Tuesday. They said this deal helps them simplify their business and focus on areas where they are strong.

“Shell Nigeria Gas has served industrial and commercial customers in Nigeria for more than 25 years, supported by the commitment and expertise of its people,” said Elohor Aiboni, Shell’s country chair in Nigeria.

Aiboni added, “We believe this agreement provides a much stronger platform for the business’ next chapter under new ownership. Shell continues to focus on strategic Deepwater and Integrated Gas positions in Nigeria.”

The financial details of the deal were not shared by either company.

This agreement still needs regulatory approvals. It includes Shell Nigeria Gas Holding B.V., which was set up in 2019 and owns all but one share in Shell Nigeria Gas Limited.

For now, Shell Nigeria Gas Group will continue to operate as part of Shell and serve its customers as usual until the sale is complete.

Shell Nigeria Gas started in 1998 and supplies natural gas to industrial and commercial customers. They manage about 170 kilometers of pipeline across Ogun, Abia, and Rivers states.

The company serves over 130 connected customers. However, they do not engage in upstream gas production, liquefied natural gas (LNG) operations, or international gas trading.

Vaaris Energy is a privately owned Nigerian company involved in the oil and gas sector.

This sale is part of Shell’s wider strategy to simplify its global operations under CEO Wael Sawan and to focus on projects that offer better returns.

In Nigeria, Shell has stated that it will still focus on deepwater operations and integrated gas, including its interest in Nigeria LNG.

Last week, Shell raised its forecast for third-quarter integrated gas production to between 740,000 and 780,000 barrels of oil equivalent per day. This is an increase from their earlier estimate of 570,000 to 630,000 barrels of oil equivalent per day.