SNG Seeks Expansion Of Pipeline Connectivity To Link Gas To Productive Areas

Shell Nigeria Gas (SNG) Limited said that expanding pipeline connectivity is critical to enable manufacturers and other productive industries across the country access and benefit from Nigeria’s abundant natural gas resources.

The firm therefore advised the federal government to accelerate the development of domestic gas pipeline infrastructure in line with Nigeria’s Decade of Gas initiative. According to the company,

The company said Nigeria has 215.19 trillion cubic feet of proven-plus-probable gas reserves, but manufacturers continue to spend heavily on alternative energy because of limited access to reliable pipeline gas.

It disclosed that manufacturers spent approximately N1.34trillion on alternative energy in 2025, adding that expanding pipeline infrastructure would help reduce energy costs and improve industrial competitiveness.

In a presentation titled ‘Gas for Manufacturing: Closing the Pipeline Infrastructure Gap to Improve Manufacturing Competitiveness,’ delivered at the Manufacturers Energy Security & Energy Efficiency Summit held in Lagos recently, the company identified inadequate gas pipeline infrastructure as a major constraint to unlocking the full potential of Nigeria’s gas resources for manufacturing and industrial production.

The Managing Director of Shell Nigeria Gas Limited, Ralph Gbobo, represented by Asset Reliability and Integrity Manager, Samuel Ojo, said, “Despite Africa’s abundant natural gas resources, Europe has more than 10 times the gas transmission pipeline infrastructure per capita. Closing this infrastructure gap is essential to improving manufacturers’ access to reliable, affordable, and cleaner energy, reducing dependence on liquid fuels, and enabling greater use of natural gas for both electricity generation and industrial processes such as boilers, steam systems and kilns. This will enhance industrial competitiveness and support economic growth across Nigeria and Africa.”

He said on the potential cost benefits, Shell presented an illustrative comparison showing that pipeline gas has an electricity cost index of 30 per cent, “compared with 100 per cent for diesel-powered self-generation and 62 per cent for grid electricity combined with diesel backup.”

The comparison means that those using gas for power will reduce their energy costs by 70 per cent when compared with what they should spend using diesel to generate energy.

However, the company said actual savings depend on viable pipeline connections and dependable gas supplies, adding that costs vary from one industrial location to another.

Regarding ongoing infrastructure developments, Shell highlighted the Obiafu-Obrikom-Oben pipeline as a critical link connecting Nigeria’s eastern and western gas networks, enabling more efficient transportation across the country

The company also identified the Ajaokuta-Kaduna-Kano Pipeline as a strategic project for extending gas access to northern Nigeria and unlocking new industrial and manufacturing demand centres. In addition, Shell highlighted the Escravos-Lagos Pipeline System II which expanded the system’s design gas transmission capacity from approximately 1.1 billion to 2.3 billion standard cubic feet per day, strengthening gas supply to existing and future industrial customers.

The company added that government initiatives, including the Decade of Gas programme, the Midstream and Downstream Gas Infrastructure Fund, and other gas-sector investment incentives are helping to catalyse investment in the critical infrastructure needed to unlock Nigeria’s potential.

Meanwhile, Shell Nigeria Gas said it has continued to invest in gas distribution infrastructure to support manufacturing and industrial clusters across Ogun, Abia and Rivers States.

The company disclosed that it had built more than 150 kilometres of pipeline infrastructure and currently supplies natural gas to over 140 manufacturers. According to Shell, these investments demonstrate the role of gas infracture in improving energy reliability, reducing operating cost, and enhancing the competitiveness of Nigerian Manufacturers.

The SNG added that its gas supply to the industries stands at 60 million standard cubic feet per day, equivalent to 300 megawatts of power, explaining that its distribution system connects trunkline supplies to factories through pressure reduction and metering facilities, distribution pipelines and factory connections.

To accelerate the expansion of gas infrastructure, the company urged the federal government to complete and commission trunklines, streamline permitting processes, and channel eligible financing towards commercially viable infrastructure projects.

Shell further urged the Manufacturers Association of Nigeria (MAN) and business owners to aggregate demand across industrial clusters, establish their consumption requirements and equipment readiness, and enter credible offtake agreements to support infrastructure investment.

According to Shell, a more extensive and reliable gas network would not only enhance manufacturing competitiveness but also strengthen critical sectors such as food processing, fertiliser production, and cold-chain logistics. The company stressed that improving energy security is increasingly becoming a prerequisite for broader economic resilience and national security