Shell Nigeria Gas (SNG), a wholly-owned Shell subsidiary, has signed a $100 million agreement with Oyo State to develop a gas supply and distribution network for industrial and commercial users across the state.

Under the 20-year deal, SNG will construct and operate the pipeline network, which is expected to deliver up to 60 million standard cubic feet of gas per day, according to a statement from Shell Nigeria reported by the outlet. 

Established in 1998, SNG currently supplies gas to over 150 clients in four Nigerian states.

The project will begin with a 15-kilometer pipeline and is expected to bring its first gas flow in the fourth quarter of 2025.

"We're ready to partner with more companies and other organizations to enhance the delivery of relevant projects," Oyo State Governor Seyi Makinde said, hailing the project as a catalyst for development, adding it aligns with the state's plan to drive innovation and industrialization.

SNG Managing Director Ralph Gbobo said the agreement marks a significant milestone for both parties.

"This gas distribution project will be a game-changer in the industrialization drive of the Oyo State Government and help boost internally generated revenue and result in more job opportunities," Gbobo noted.

He added that the project aligns with Nigeria's Decade of Gas initiative, which aims to leverage natural gas for national progress.

The Shell Petroleum Development Company of Nigeria Limited's Managing Director and Chairman, Shell Companies in Nigeria, Osagie Okunbor, emphasized the importance of partnerships in providing cleaner energy solutions.

"Building on our presence in the country since the 1960s, we are excited about developing gas distribution solutions and delivering competitive and reliable energy for Nigeria," Okunbor said.

This agreement comes amid the Nigerian government's push to discourage the transportation of compressed natural gas by road. 

Recently, the Minister of State for Petroleum (Gas), Ekperikpe Ekpo, recently directed regulatory bodies to only grant licenses to gas companies with pipeline infrastructure.