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Shell Sells Its Nigerian Gas Distribution Business to Vaaris Energy, Closing a 28-Year Chapter
Shell is leaving the business of piping natural gas to Nigerian factories. The company announced on Tuesday that Shell Petroleum B.V. has signed an agreement to sell its entire interest in the Shell Nigeria Gas Group to Vaaris Energy Limited, a privately held Nigerian energy firm. The price was not disclosed, and the deal still needs regulatory approval.
Shell Nigeria Gas, known as SNG, was set up in 1998 and supplies natural gas by pipeline to industrial and commercial customers. According to reporting on the deal, it runs about 170 kilometres of pipeline across Ogun, Abia and Rivers states and serves more than 130 customers. The business is strictly a distributor: it does not produce gas, operate liquefied natural gas plants or trade gas internationally. The sale covers Shell Nigeria Gas Holding B.V., a company formed in 2019 that owns all but one share of Shell Nigeria Gas Limited.
Shell’s country chair in Nigeria, Elohor Aiboni, said the business has served customers for more than 25 years and that the transaction gives it a stronger platform under new ownership while letting Shell concentrate on what it called strategic deepwater and integrated gas positions in Nigeria. The company described the sale as consistent with its strategy of simplifying its portfolio and putting money where it has competitive strengths. Vaaris Energy, for its part, is a Nigerian firm with interests across the oil and gas value chain and an existing operating presence in the country.
The sale fits a clear pattern. In March 2025, Shell completed the sale of its onshore oil subsidiary, the Shell Petroleum Development Company, to Renaissance, a consortium of mostly Nigerian companies, ending decades of direct onshore operations. Reuters reported at the time that the deal was worth up to $2.4 billion, including $1.3 billion for the company and up to $1.1 billion tied to earlier receivables. Shell has meanwhile put new money offshore, lifting its stake in the Bonga deepwater field from 55 percent to 65 percent in November 2025 and approving the HI offshore gas project, which is expected to supply about 350 million cubic feet of gas a day to Nigeria LNG at peak. The company stays in Nigeria through its stake in Nigeria LNG, so this is a retreat from pipelines and customers, not a departure from the country’s gas.
For customers, the practical question is whether service will change. Industrial buyers of piped gas rely on steady supply and clear contracts to run boilers, furnaces and power equipment, so a change in ownership matters mostly if it affects reliability, pricing or investment. Analyst commentary has noted that the outcome will depend on Vaaris’s investment plans and ability to expand the network, and none of the announcements describe changes to existing agreements. Until the deal receives approval, SNG continues to operate under Shell.
The timing also reflects Nigeria’s policy push to increase domestic gas use. Reports on the sale link it to the government’s National Gas Expansion Programme, which aims to extend gas to industry, power and transport. A Nigerian-owned distributor with its own capital may find it easier to build new connections, though building pipelines to more customers takes substantial investment, and small distribution networks often struggle to reach scale. What the sale does show is the continued shift of Nigerian assets from international majors to local operators, a trend that has changed who owns the country’s oil and gas infrastructure.
Questions remain open. The price, the approvals required, the expected closing date and what Vaaris plans for the network have not been announced. Readers who rely on SNG gas should watch for regulatory filings and customer notices over the coming months.
