Shell Intensifies gas drive to cut production costs for Nigerian industries

Shell Nigeria Gas has intensified efforts to drive the adoption of natural gas among manufacturers, citing lower operating costs, improved reliability, and stronger long-term competitiveness for industries grappling with rising energy expenses in Nigeria.

Shell Nigeria Gas (SNG) said businesses switching from liquid fuels such as diesel to natural gas are already recording gains in operational efficiency, cost predictability, and production stability.

Speaking at a Business and Investment Forum held in Port Harcourt, SNG’s Head of Gas Distribution, Chukwuka Amos-Ejesi, who represented the Managing Director, Ralph Gbobo, said natural gas offers manufacturers a strategic advantage in an increasingly challenging economic environment.

According to him, companies embracing natural gas are benefiting from “lower and more predictable energy costs,” reduced exposure to the volatility of diesel and other liquid fuel prices, and improved operational uptime. He added that the transition also enables manufacturers to plan production more efficiently while strengthening their competitiveness in both local and export markets.

The push comes at a time when many Nigerian manufacturers continue to battle high energy costs, foreign exchange pressures, and unstable power supply, factors that have significantly increased production expenses across several sectors.

SNG noted that its expanding gas distribution network is designed to provide industries with a cleaner and more dependable alternative to conventional fuels. The company currently operates an extensive pipeline and gas distribution infrastructure serving industrial clusters in Ogun, Rivers, and Abia states.

As part of its latest expansion drive, the company recently onboarded two new industrial customers in Agbara, Ogun State — Intercontinental Distillers Limited II and Rumbu Industries Limited — into its gas distribution network. The additional supply is expected to deliver energy equivalent to about 4 megawatts of electricity, helping the firms improve productivity while reducing operational costs.

Shell explained that natural gas remains more reliable than liquid fuels because it is supplied continuously through pipelines rather than transported by trucks, thereby reducing disruptions associated with fuel logistics and shortages. The company also highlighted the absence of heavy storage requirements and lower environmental impact as added advantages for manufacturers.

Industry stakeholders at the forum, including representatives of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Bank of Industry, manufacturers’ associations, and investment agencies, discussed opportunities for expanding gas-powered industrial growth in the Niger Delta and other parts of the country.

The development aligns with Nigeria’s broader “Decade of Gas” initiative, which seeks to deepen domestic gas utilisation, reduce dependence on imported and expensive fuels, and position gas as a transition energy source for industrialisation and economic diversification.

Shell Nigeria Gas, established in 1998, said it has continued to scale up investments in gas infrastructure to support industrial customers. The company disclosed that its distribution network now spans more than 138 kilometres and serves over 150 industrial customers nationwide, with plans for further expansion.