MONTREAL (Oil Monster): Shell has agreed to sell its entire interest in the Shell Nigeria Gas Group to Nigerian energy company Vaaris Energy, marking a planned exit from domestic gas distribution while the energy major continues investing in Nigeria’s Deepwater and Integrated Gas businesses.
The transaction covers Shell Nigeria Gas Limited and Shell Nigeria Gas Holding B.V., which holds all but one share in the Nigerian distribution company.
Financial terms were not disclosed. The transaction remains subject to regulatory conditions and approvals, meaning Shell will continue to own and operate the business until closing.
Shell Petroleum B.V. signed the agreement to transfer its full interest in the Shell Nigeria Gas Group to Vaaris Energy Limited.
Vaaris is a Nigerian energy company with interests across the oil and gas value chain and an existing operational presence in the country.
The transaction represents a change in ownership of Shell’s downstream domestic gas distribution business rather than an exit from Nigeria’s broader oil and gas sector.
The transaction includes Shell Nigeria Gas Holding B.V., a Netherlands-registered entity established in 2019.
The holding company owns all but one of the shares in Shell Nigeria Gas Limited.
Shell Nigeria Gas Limited was established in 1998 and has supplied natural gas to Nigerian industrial and commercial customers for more than 25 years.
The business currently operates approximately 170 kilometres of gas transmission and distribution infrastructure across Ogun, Abia and Rivers states.
More than 130 commercial and industrial customers are connected to the network.
Shell Nigeria Gas supplies natural gas directly to manufacturing, industrial and commercial users rather than participating in upstream gas production.
The company’s distribution infrastructure includes major industrial gas networks serving the Agbara-Ota area in Ogun State, the Aba industrial cluster in Abia State and customers around Port Harcourt in Rivers State.
These networks give industrial consumers access to pipeline natural gas as an alternative to diesel and other liquid fuels.
Shell has previously positioned the business as part of Nigeria’s effort to increase domestic utilization of its natural gas resources.
Shell Nigeria Gas substantially expanded its distribution capability in 2018 through the Agbara-Ota Capacity Increase Project.
The project increased capacity on the Agbara-Ota system by about 150%, from roughly 42 million standard cubic feet per day to 102 million standard cubic feet per day at the time.
Shell’s existing SNG information page subsequently described the broader distribution network as capable of handling more than 150 million standard cubic feet per day of processed gas.
Those figures describe historical system capacity and should be distinguished from the current transaction announcement, which focuses on the network’s approximately 170-kilometre footprint and more than 130 connected customers.
The sale does not transfer Shell’s upstream Nigerian gas production, its LNG interests or its international natural gas trading business.
Shell Nigeria Gas is a domestic distribution company serving local commercial and industrial consumers.
That distinction is important because Shell continues to hold major positions elsewhere in Nigeria’s natural gas value chain.
Shell Country Chair in Nigeria Elohor Aiboni said the company will continue focusing on strategic Deepwater and Integrated Gas positions in the country.
Those businesses include Shell’s interest in Nigeria LNG as well as offshore gas and oil developments.
The company’s strategy therefore reflects portfolio concentration rather than a withdrawal from Nigeria.
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Shell’s continued investment in the HI gas development illustrates the type of Nigerian asset the company intends to retain.
Shell Nigeria Exploration and Production Company and Sunlink Energies took a final investment decision on the offshore HI project in 2025.
The development is expected to supply up to 350 million standard cubic feet of gas per day to Nigeria LNG at peak production, with first gas targeted before 2030.
The project links Shell’s Nigerian upstream operations directly with its Integrated Gas and LNG strategy.
Shell has simultaneously strengthened its position in Nigerian deepwater oil.
In 2025, TotalEnergies agreed to sell its 12.5% interest in the OML 118 production-sharing contract to Shell Nigeria Exploration and Production Company for $510 million.
OML 118 contains the producing Bonga field and the Bonga North development.
The transaction reinforced Shell’s stated preference for large-scale offshore assets while it reduces exposure to businesses outside those strategic areas.
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The planned transfer to Vaaris also fits a broader trend toward greater Nigerian ownership and operation of domestic energy infrastructure.
International oil companies have increasingly concentrated their Nigerian portfolios around deepwater, LNG and other large-scale projects while local operators expand across onshore, midstream and distribution assets.
For Vaaris, the acquisition would provide an established natural gas distribution platform with existing industrial customers and pipeline infrastructure.
Reliable domestic gas infrastructure remains an important issue for Nigerian manufacturers and industrial users because many businesses continue to depend on more expensive diesel or self-generated power.
Pipeline gas can provide industrial clusters with an alternative fuel source when distribution infrastructure is available.
However, Nigeria continues to face challenges expanding those networks. OilMonster reported earlier this year that a dispute over distribution rights had delayed a separate $100 million gas-pipeline project serving industrial users in southwestern Nigeria.
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Shell said Shell Nigeria Gas will continue operating normally until the transaction is completed.
Existing industrial and commercial customers are expected to continue receiving gas under current operations while regulatory approvals are processed.
No closing date has been disclosed.
Neither Shell nor Vaaris disclosed the purchase price or other financial terms of the transaction.
Without those figures, the deal should not be characterized as a transaction of a particular dollar value.
The available disclosures focus instead on the strategic shift in ownership and Shell’s decision to concentrate capital elsewhere in its Nigerian portfolio.
The transaction must now receive the required Nigerian regulatory approvals and satisfy other customary closing conditions.
Until that process is complete, Shell Nigeria Gas remains part of Shell.
After closing, Vaaris would take control of the domestic gas distribution platform, while Shell continues concentrating its Nigerian investment on Deepwater and Integrated Gas businesses.
What is Shell selling in Nigeria?
Shell has agreed to sell its full interest in the Shell Nigeria Gas Group, its domestic natural gas distribution business, to Vaaris Energy.
Has Shell completed the sale?
No. The transaction remains subject to regulatory conditions and approvals.
How large is Shell Nigeria Gas?
The business operates approximately 170 kilometres of pipeline infrastructure and serves more than 130 connected commercial and industrial customers across Ogun, Abia and Rivers states.
Does the sale include Shell’s LNG business?
No. Shell Nigeria Gas does not operate upstream production, LNG facilities or international gas trading. Shell is retaining its strategic Integrated Gas interests in Nigeria, including its interest in Nigeria LNG.
Is Shell leaving Nigeria?
No. Shell says it will continue focusing on Deepwater and Integrated Gas operations in Nigeria.
Who is buying Shell Nigeria Gas?
Vaaris Energy Limited, a Nigerian energy company with interests across the oil and gas value chain, has agreed to acquire the business.
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Sources: Shell; Reuters.
