Nigeria's Shoreline signs $300mn gas deal with Shell

In a groundbreaking move to develop markets and distribute natural gas around Lagos, Royal Dutch Shell's Nigerian business has signed a $300 million agreement with Shoreline Energy. Kola Karim, Chairman and CEO of Shoreline Energy, joined CNBC Africa to provide insight into this transformative deal. Karim expressed his enthusiasm for the partnership, highlighting the significance of the development for Nigeria, particularly in line with the government's efforts and the Light-Up Lagos initiative. The agreement aims to distribute gas throughout Lagos Island, with Gasland, a company under Shoreline Energy, leading the way. Gasland holds the concession to distribute gas from areas like Lekki, Eko Atlantic, and Victoria Island, creating a transformative opportunity to provide gas access to residents and businesses in the region. The development is already well underway, with work having commenced over a year ago. The 20-year concession, coupled with support from the federal government and NNPC, reflects a strong commitment to delivering on the promise of expanded gas access in the region. The involvement of Shell brings not only financial backing but also technical expertise, leveraging the company's global experience in executing projects of such scale. Karim emphasized that the focus on gas by major international oil companies stems from the shift towards cleaner energy sources following the downturn in oil prices. It's not just about local capacity, Karim explained, but also about the technical and financial capabilities required for such projects. Compared to local financing costs, Shell's involvement not only reduces expenses but also brings valuable knowledge of the upstream sector. The environmental implications of the project were also addressed, with Karim noting the clean nature of natural gas and its positive impact on the environment. Shell's commitment to ensuring environmental responsibilities are met aligns with the goal of providing cleaner energy solutions to Nigerians. Beyond powering households and businesses, the project aims to enhance electricity generation, contributing to the overall improvement of the energy landscape. Karim highlighted the importance of the project in job creation, with the construction of the 125-kilometer gas pipeline set to generate employment opportunities. Additionally, the industrial growth expected from enhanced gas distribution is poised to boost Lagos' internally generated revenue and support the government's economic objectives. Looking ahead, the focus remains on the Gasland concession area in Lagos Island, with plans to expand to other cities in Nigeria. The success of the partnership with Shell in Lagos sets a precedent for potential expansions and the replication of clean energy initiatives across the country. By enabling direct access to natural gas for consumers, the project serves as a catalyst for empowering businesses and industries to take control of their energy supply. The technical challenges of executing the project were also considered, particularly in a densely populated city like Lagos. However, Karim expressed confidence in the infrastructure plans and government commitment, emphasizing that the project aligns with existing urban development strategies. In conclusion, the Shell and Shoreline Energy partnership signifies a significant step towards transforming the energy landscape in Lagos and Nigeria as a whole. The collaboration not only addresses the immediate need for cleaner energy solutions but also paves the way for sustainable growth and job creation in the region. With a strong emphasis on environmental responsibility and economic impact, the gas distribution project stands as a key driver of progress in Nigeria's energy sector.