Shell to Exit Nigeria’s Gas Distribution Business, Sell Stake to Vaaris Energy

Shell has agreed to sell its entire interest in Shell Nigeria Gas Group to Nigerian energy company Vaaris Energy Limited, marking its planned exit from Nigeria’s domestic gas distribution business after more than 25 years in the market. The transaction, announced on October 13, remains subject to regulatory approvals and other conditions.

The agreement covers Shell Nigeria Gas Holding B.V., established in 2019, which holds all but one of the shares in Shell Nigeria Gas Limited. The financial terms have not been disclosed, and the companies have not announced a completion date. Until the deal closes, Shell Nigeria Gas Group will remain under Shell’s ownership and continue serving its customers as usual.

Established in 1998, Shell Nigeria Gas supplies natural gas to industrial and commercial customers through approximately 170 kilometres of pipeline infrastructure across Ogun, Abia and Rivers states. The business serves more than 130 connected customers, making it an important link between gas supplies and businesses that rely on the fuel for their operations.

The sale is limited to domestic gas distribution. It does not include Shell’s upstream gas production, liquefied natural gas operations or international gas trading businesses. Shell has said it will continue to focus on strategic deepwater and integrated gas investments in Nigeria, including its interest in Nigeria LNG.

Shell’s country chair in Nigeria, Elohor Aiboni, said the gas distribution business had served industrial and commercial customers for more than 25 years, crediting its workforce for supporting those operations. She described the agreement as an opportunity for the business to develop under new ownership while reaffirming Shell’s focus on its remaining strategic positions in the country.

The deal also gives Vaaris Energy an opportunity to take over an established distribution network with an existing customer base. The Nigerian company has interests across the oil and gas value chain, but the buyer’s specific plans for expanding the network, improving supply reliability or extending services to additional industrial customers have not been publicly detailed in the reports reviewed.

The transaction fits into Shell’s broader effort to simplify its portfolio and concentrate capital on businesses where it believes it has competitive strengths. In Nigeria, that shift has included the completed sale of its onshore oil subsidiary, Shell Petroleum Development Company of Nigeria, to the Renaissance consortium in March 2025. That earlier transaction was separate from the current gas distribution deal, and Shell has continued to retain other Nigerian oil and gas interests.

For Nigeria, the significance of the proposed sale will ultimately depend on what follows the change in ownership. Domestic gas distribution is essential to connecting energy resources with manufacturers and commercial users, but the transfer alone does not guarantee lower costs, more reliable supply or wider access. If Vaaris can maintain the existing network and invest in its expansion, the acquisition could strengthen indigenous participation in the gas value chain. The broader test is whether local ownership translates into better infrastructure, dependable energy for businesses and lasting economic value.