Oyo State Governor Seyi Makinde has reportedly explained that NIPCO was granted the right to lay a gas pipeline across the state after Shell committed between $70 million and $80 million to a gas pipeline project agreed upon with the state government.
According to the statement attributed to the governor, the state is now exploring the possibility of conceding some local government areas to Shell as part of efforts to advance gas infrastructure development and expand access to natural gas across Oyo State.
The development highlights the growing importance of private-sector investment in the state's energy infrastructure, particularly as the government seeks to strengthen industrial activities, improve energy supply and create an environment that attracts businesses and investors.
Shell’s Gas Investment and Oyo State’s Industrial Ambitions
Oyo State has pursued partnerships with energy companies to expand natural gas infrastructure and support its economic development agenda.
On May 3, 2024, the Oyo State Government and Shell Nigeria Gas (SNG) signed a final investment agreement valued at more than $100 million for a gas infrastructure development and distribution project. The agreement provides for the construction of a pressure reduction and metering station, alongside gas distribution pipelines intended to supply industrial, manufacturing and commercial customers across the state.
Under the arrangement announced at the time, Shell Nigeria Gas was to develop and operate the infrastructure under a Build-Own-Operate-Transfer (BOOT) model, with ownership scheduled to transfer to the Oyo State Government after 20 years. The project was designed to begin with approximately 15 kilometres of pipeline infrastructure and expand to deliver up to 60 million standard cubic feet of gas daily.
The investment was expected to improve access to energy for businesses, support industrial expansion and reduce dependence on alternative fuels that can increase production costs. <SourceNote />
NIPCO’s Pipeline Project Across Ogun and Oyo
Separately, NIPCO Gas Limited has been developing a natural gas pipeline project linking Ogun State to Ibadan in Oyo State.
According to a project notice published by Nigeria’s Federal Ministry of Environment in January 2023, the proposed infrastructure involved an 18-inch, 60-kilometre pipeline extending from Ogere in Ogun State to the Ibadan Tollgate area of Oyo State.
The project was intended to transport natural gas to industrial users, supporting manufacturing operations, power generation and broader domestic gas utilisation. The environmental assessment process also identified locations in both Ogun and Oyo states where members of the public could access the project documentation and submit comments. <SourceNote />
NIPCO’s pipeline initiative and Shell’s gas distribution project represent distinct infrastructure developments, although both are connected to the wider objective of improving natural gas availability for businesses in southwestern Nigeria.
What the Proposed Local Government Concessions Could Mean
The governor's reported remarks about conceding some local government areas to Shell raise important questions about the geographical scope of the proposed arrangement, the terms of the concession and the responsibilities of the parties involved.
Further clarification would be needed to establish which local government areas are being considered, what the proposed concession would cover, and whether it relates to pipeline routes, gas distribution operations or a broader investment framework.
If structured effectively, expanded gas infrastructure could help attract manufacturing companies, improve the reliability of industrial energy supply and create employment opportunities. However, the long-term benefits would depend on transparent agreements, effective regulation, environmental safeguards and meaningful engagement with affected communities.
For residents and businesses across Oyo State, the central question is how these investments will translate into reliable energy access, stronger economic activity and tangible development outcomes.
Note: The specific claim that NIPCO received pipeline rights after Shell committed $70 million to $80 million, as well as the reported proposal to concede local government areas to Shell, requires direct confirmation from the governor’s original statement or an official government record. The publicly available project reports cited above establish the broader NIPCO and Shell gas infrastructure initiatives but do not independently confirm those precise details.
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