Mkpoikana Udoma
Port Harcourt — After nearly four decades of silence beneath the waters of Nigeria’s Niger Delta, the long-forgotten HI gas field near revival, following the Shell Nigeria Exploration and Production Company Limited, SNEPCo, and its partner, Sunlink Energies and Resources Limited, $2 billion final investment decision to develop the HI offshore gas project in Oil Mining Lease, OML144.
The project, discovered in 1985 but stalled for decades by policy inertia and fiscal bottlenecks, will now deliver 350 million standard cubic feet of gas per day, mmscfd, from 2028, enough to supply almost a third of the feedstock needed for Nigeria LNG Limited’s Train 7 project.
A 40-Year Journey from Dormancy to Development
The HI field’s story mirrors Nigeria’s broader struggle, a nation endowed with one of the world’s largest gas reserves but hampered for decades by uncertainty, bureaucracy, and inconsistent policies.
Discovered 40 years ago, the HI field remained stranded because previous investment regimes offered little incentive for non-associated gas projects. The cost of development and a complex web of approvals discouraged operators.
That narrative began to change in 2024, when President Tinubu introduced a suite of targeted energy reforms through Presidential Directive 40. The directive established a competitive fiscal framework for Non-Associated Gas, NAG, developments in onshore and shallow offshore fields, providing the certainty and incentives investors had long demanded.
Special Adviser to the President on Energy, Olu Arowolo Verheijen, said the directive was a game-changer.
“With the HI FID, we are bringing to life a field discovered forty years ago. Directive 40 has finally unlocked what was once stranded potential,” she said. “This is proof that with the right incentives and policy clarity, Nigeria can convert its vast gas resources into growth, jobs, and cleaner energy.”
$8 Billion in Fresh Energy Investments
The HI gas project is the third major FID in Nigeria’s oil and gas industry within 18 months, following Shell’s Ubeta Non-Associated Gas Project and the Bonga North Deepwater Project. Together, these three investments represent more than $8 billion in new upstream commitments since 2023.
President Tinubu has been quick to link these developments to his government’s reforms aimed at rebuilding investor confidence.
“This major FID announcement by Shell, their second in one year, is a clear validation of our wide-ranging reform efforts and a signal to the world that Nigeria is fully open for business and investment,” Tinubu had said in a statement.
The reforms coordinated by the Office of the Special Adviser on Energy include fiscal incentives, regulatory clarity, simplified contracting processes, and shorter project approval timelines, all now embedded in law.
A Boost for NLNG and the Global Gas Chain
The HI gas field’s development will directly benefit Nigeria LNG Limited, NLNG, whose Train 7 expansion, under construction at Bonny Island will increase production capacity by 8 million metric tonnes per annum, or about 35 percent more than current output.
When completed, the HI project will feed nearly one-third of Train 7’s gas requirement, bolstering the reliability of feedgas supply and securing Nigeria’s position in the global LNG market.
Verheijen noted that the HI and Ubeta gas projects combined will supply up to 15 percent of NLNG’s total feedgas needs across Trains 1 to 7.
“With the Ubeta FID and now the HI FID, we have secured the gas supply needed to make NLNG Train 7 not just possible, but transformative,” she said.
Shell’s Upstream President, Peter Costello, added that the decision underscores Shell’s continued commitment to Nigeria’s energy transition goals.
“Following recent investment decisions related to the Bonga deep-water development, today’s announcement demonstrates our continued commitment to Nigeria’s energy sector, with a focus on Deepwater and Integrated Gas,” Costello said.
“This upstream project will help Shell grow our leading Integrated Gas portfolio, while supporting Nigeria’s plans to become a more significant player in the global LNG market.”
Jobs, LPG Supply, and Foreign Exchange Gains
Beyond its export potential, the HI project promises substantial economic and social dividends for Nigeria.
According to government projections, the project will expand domestic LPG availability, reduce dependence on imports, and advance clean cooking access for millions of households. The initiative aligns with Nigeria’s Decade of Gas programme, which prioritizes gas as both a transition fuel and an engine for economic growth.
“These projects will strengthen the reliability of Nigeria’s LNG exports to global markets while expanding LPG supply for domestic use, reducing imports, boosting foreign exchange earnings, and advancing clean cooking access,” Verheijen explained.
The development is also expected to create thousands of direct and indirect jobs during construction and operation, particularly in the Bonny Island and Nembe areas, while catalyzing small and medium-sized enterprises, SMEs, in host communities.
The increased gas output from the HI field could save Nigeria hundreds of millions of dollars annually in LPG import costs and strengthen the naira through enhanced export earnings.
Technical Snapshot: What the HI Project Involves
The HI gas field, located about 50 kilometres from the coast in 100 metres of water, holds an estimated 285 million barrels of oil equivalent, mmboe, in recoverable reserves.
The project, operated jointly by Sunlink Energies (60%) and Shell (40%), will feature; a wellhead platform with four production wells; a pipeline network transporting gas to Bonny Island; a new gas processing plant to prepare the feedstock for NLNG and send condensate to the Bonny Oil and Gas Export Terminal.
Production is expected to begin before the end of the decade, contributing significantly to Shell’s goal of growing its global LNG output by 4-5 percent per year until 2030.
Policy Confidence and the Road Ahead
Nigeria’s new gas trajectory has rekindled optimism among investors, with more Final Investment Decisions expected in the coming months.
Verheijen described the HI gas project as a “blueprint success” of Nigeria’s reformed energy governance framework.
“These landmark projects, the HI and Ubeta gas projects and the Bonga North deepwater represent the blueprint for our gas industrialization agenda. And this is only the beginning; more FIDs are on the horizon as we unlock Nigeria’s vast gas potential to drive industrialization and create jobs.”
As the global shift toward cleaner fuels accelerates, Nigeria’s ability to convert its 209 trillion cubic feet of proven gas reserves into economic value will determine its competitiveness in the coming decades.
Gas as the Bridge to Nigeria’s Energy Future
The HI gas project is more than a commercial investment; it is a symbol of policy success, industrial renewal, and energy transition in motion.
For a country that once struggled to attract investment into non-associated gas development, the revival of a field discovered in 1985 now stands as evidence that reform pays.
From Abuja’s policy corridors to the creeks of the Niger Delta and the industrial heart of Bonny Island, the $2 billion HI project tells a larger story: Nigeria’s gas, once a sleeping giant, can finally power its people, its industries, and its future.
This article was originally posted at sweetcrudereports.com
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