Oyo State set for gas transformation: Analysing Shell’s pipeline deal

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In a move with significant implications for Oyo State’s industrial development, Shell Nigeria Gas (SNG) signed an agreement with the state government to build and operate a gas distribution network. This pipeline infrastructure, spanning an initial 15 kilometers, aims to deliver natural gas to industrial and commercial users across the state for the next 20 years.

A statement released on Friday by Shell Nigeria’s Media Relations Manager, Abimbola Essien-Nelson, disclosed that SNG will build and operate the gas distribution network which will serve customers across Oyo State for 20 years.

According to the statement, the project will start with the construction of gas distribution infrastructure along a 15km pipeline route, adding that it will grow to deliver up to 60 million standard cubic feet of gas per day across the state.

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Speaking at the signing ceremony, the Oyo State Governor Seyi Makinde, described the project as a catalyst for development in the state.

Makinde said, “This project fits into our plan to drive innovation and industrialisation in Oyo State and we’re ready to partner with more companies and other organisations to enhance the delivery of relevant projects”.

Speaking, the Managing Director of SNG, Ralph Gbobo, noted that the agreement was “a significant milestone for SNG and Oyo State to boost economic activities in Nigeria by supplying industries and manufacturers with natural gas, a more reliable, cost-efficient and environmentally friendly source of energy.”

Boosting Industry and Manufacturing

Analysts view this project as a potential catalyst for Oyo’s economic growth. Easy access to natural gas offers several advantages over traditional fuels like diesel. Firstly, natural gas burns cleaner, reducing air pollution and aligning with Nigeria’s push for cleaner energy sources. Secondly, natural gas is often more cost-effective, potentially lowering production costs for industries in Oyo. This could improve their competitiveness and lead to increased investment and job creation.

Initial Phase and Expansion Potential

The initial 15km pipeline signifies the first stage of the project. With the capacity to deliver 60 million standard cubic feet of gas per day upon expansion, this infrastructure offers substantial potential for future growth. This scalability could prove crucial for attracting new industries to the state, especially those requiring significant gas supplies.

Challenges and Considerations

While the project presents exciting possibilities, challenges remain. The environmental impact of constructing and operating the pipeline needs careful assessment and mitigation measures. Additionally, ensuring fair pricing and equitable distribution of gas throughout Oyo will be crucial for maximizing the project’s benefits.

Overall, Shell’s agreement to build gas pipelines in Oyo marks a significant development with the potential to transform the state’s industrial landscape. The project’s success will depend on effective implementation, addressing environmental concerns, and ensuring widespread access to this cleaner and potentially cheaper fuel source.