LAGOS, Oct 14 – Shell Plc has agreed to sell its entire interest in Shell Nigeria Gas (SNG) Group to Nigerian energy company Vaaris Energy, transferring a domestic gas distribution business that supplies industrial and commercial customers across Nigeria.
Announced on Tuesday, the transaction remains subject to regulatory approvals and other conditions. The companies have not disclosed the financial terms of the deal.
The sale covers Shell Nigeria Gas Holding B.V., established in 2019, which owns all but one of the shares in SNG Limited, the operating company responsible for the group’s Nigerian gas distribution activities.
The divestment forms part of Shell Chief Executive Officer Wael Sawan’s strategy to simplify the company’s global portfolio and concentrate investment on businesses expected to generate stronger returns.
Shell’s Country Chair in Nigeria, Elohor Aiboni, said the business had served industrial and commercial customers for more than 25 years, supported by the experience and commitment of its employees.
“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,” Aiboni said.
Shell added that SNG Group would continue operating normally and supplying its customers until the transaction is completed.
Vaaris Takes Over Established Gas Distribution Network
Established in 1998, Shell Nigeria Gas supplies natural gas to industrial and commercial users through approximately 170 kilometres of pipeline infrastructure across Ogun, Abia and Rivers states.
The network provides an established distribution platform connecting gas supplies to businesses that use the fuel for industrial processes, manufacturing and other commercial activities.
Vaaris Energy is a privately held Nigerian company established by a consortium of local oil and gas industry participants, with interests across the energy value chain and an existing operational presence in the country.
The company is led by industry figures including Austin Avuru, the former chief executive of Seplat Energy, and Tein George, chairman of Seametric Engineering Ltd.
The acquisition would place the existing gas distribution business under Nigerian ownership, although the companies have yet to disclose their plans for the network following completion.
Shell Adjusts Global Gas Outlook
The transaction comes as Shell continues to manage its global production portfolio while maintaining a strategic presence in Nigeria’s deepwater oil and integrated gas sectors.
The company recently raised its third-quarter integrated gas production forecast to 740,000 to 780,000 barrels of oil equivalent per day, from its previous estimate of 570,000 to 630,000 barrels of oil equivalent per day.
The revised outlook reflects Shell’s broader management of its integrated gas operations, even as it exits selected businesses and assets.
In Nigeria, the company continues to pursue opportunities in deepwater oil and integrated gas, distinguishing those strategic operations from the domestic distribution business being sold.
Bonga South-West Project Remains a Strategic Priority
Shell’s planned divestment also comes amid government efforts to attract new investment into Nigeria’s offshore petroleum sector.
President Bola Tinubu approved targeted, investment-linked incentives for Shell’s proposed Bonga South-West deepwater oil project, with the measures intended to support a final investment decision.
The Federal Government views the project as an opportunity to increase oil production, create employment and strengthen foreign exchange earnings.
Tinubu has said the incentives are designed to encourage fresh capital commitments while protecting government revenue and securing longer-term economic benefits. The measures are targeted at new investment rather than broad-based concessions.
Taken together, Shell’s proposed sale of SNG and its continued focus on major offshore and integrated gas positions illustrate a distinction in its Nigerian portfolio strategy: exiting a domestic distribution business while retaining exposure to selected large-scale oil and gas developments.
