The Shell Petroleum Development Company of Nigeria Limited (SPDC) and Shoreline Energy Limited (parent company of Gasland Company Ltd.) have signed $ 300 million agreement to buy, market, distribute and sell natural gas to consumers and companies in the Victoria Island, Ikoyi, Lekki, and Epe areas of Lagos, Nigeria.
This deal is a classic example of the push by the world’s large energy groups to establish demand for gas in growing economies of Africa. Shell will give financial and technical support in developing a transmission and distribution pipeline network so as to generate revenues from a 20-year gas concession, which was originally owned by Gasland Company. Shoreline took 75% stakes of Gasland in the year 2015 and became the parent company.
Gas majors across the globe see Africa as an important continent to drive demand for gas as a more efficient and more environment-friendly alternative to coal, diesel, and fuel in power generation and industrial processes. Nigeria offers the biggest opportunity in the African continent as it holds the continent’s largest gas reserves. In Spite of this, the country suffers from severe power shortages only due to lack of infrastructure. As per the data released by Power Africa almost 95m people (more than half of Nigeria’s population), have no access to electricity, and the balance population which is connected to the grid suffer heavily from power outages. Out of the 12.5 gigawatts of installed generation capacity in the country, on an average only 3,500-5,000 megawatts is available. Some industries and a few rich ones who can afford, use petrol and diesel-powered generators to have their own electricity. Per capita, electricity consumption of Nigeria is less than 150-kilowatt hours which is among the lowest in the continent.
The Nigerian economists say such deals will help improve the life of Nigerian people as well the economy of the country.