Shell to sell Nigeria gas distribution business to Vaaris Energy

Shell Petroleum B.V. has signed an agreement to sell its full interest in the Shell Nigeria Gas Group to Vaaris Energy Limited, a Nigerian firm. The deal transfers Shell's domestic gas distribution business in Nigeria to Vaaris Energy, the company said in a statement on Tuesday.

The transaction is subject to regulatory conditions and approvals. It covers Shell Nigeria Gas Holding B.V., established in 2019, which holds all but one of the shares in SNG Limited.

What Shell said

Elohor Aiboni, Shell's country chair in Nigeria, said Shell Nigeria Gas has served industrial and commercial customers in Nigeria "for more than 25 years, supported by the commitment and expertise of its people".

"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," she said.

SNG Group will remain part of the company and continue to serve its customers and operate as usual until the transaction is completed.

Why Shell is selling

Shell said the sale aligns with its strategy to simplify its portfolio and concentrate investment in areas where it has competitive strengths. Its continued focus on deepwater and integrated gas operations in Nigeria, including its interest in Nigeria LNG, reflects that strategy.

SNG does not engage in upstream gas production, liquefied natural gas (LNG), or international gas trading, according to the statement.

SNG's footprint

Established in 1998, SNG supplies natural gas to industrial and commercial customers and operates about 170 kilometres of pipeline infrastructure across Ogun, Abia and Rivers states.

Vaaris Energy is a Nigerian energy company with interests across the oil and gas value chain and an existing operational presence in the country.

What it means for customers

For now, industrial and commercial gas users supplied by SNG face no immediate disruption. Shell said the business will keep serving its customers and operate as usual until the sale is completed.