No financial details disclosed (Il Sole 24 Ore Radiocor) - London, 18 Jun - Anglo-Dutch energy group Shell said its Shell Eastern Trading subsidiary reached an agreement with Carne Investments, an indirect wholly-owned subsidiary of Singapore's Temasek, to acquire 100% of the shares in Pavilion Energy, which includes a global liquefied natural gas (LNG) trading business with a contracted supply volume comprising about 6.5 million tonnes per annum (mtpa).

No financial details were disclosed.

'The acquisition of Pavilion Energy will strengthen Shell's leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio,' said Zoe Yujnovich, Shell's Integrated Gas and Upstream Director.

'We will acquire Pavilion's portfolio of LNG offtake and supply contracts, which includes additional access to strategic gas markets in Asia and Europe. By integrating these into Shell's global LNG portfolio, Shell is strongly positioned to deliver value from this transaction while helping to meet the energy security needs of our customers.' The acquisition will be absorbed within Shell's cash capital expenditure guidance, which remains unchanged. The deal is in excess of the internal rate of return (IRR) hurdle rate for Shell's Integrated Gas business, delivering on its 15-25% growth ambition for purchased volumes, relative to 2022, as outlined during the 2023 Capital Markets Day.

In addition to the 6.5 mtpa long-term sale and supply LNG contracts, Pavilion also has 2 mtpa of long-term regasification capacity at the Isle Grain LNG terminal (UK), regasification access in Singapore and Spain, as well as the time-charter of three M-type, Electronically Controlled Gas Injection (MEGI) LNG vessels and two Tri-Fuel Diesel Electric (TFDE) vessels. It also has a LNG bunkering business with its first vessel deployed in early 2024.

Pavilion Energy's pipeline gas business is not included in the deal n and will be transferred to Gas Supply Pte Ltd (GSPL), a wholly-owned subsidiary of Temasek, prior to completion. Pavilion Energy's 20% shareholding in block 1 and 4 in Tanzania are not included in the transaction.

Shell plans to grow its LNG business by 20-30% by 2030, compared with 2022, and purchased LNG volumes are planned to grow by 15-25%, relative to 2022, as outlined in the 2023 Capital Markets Day. This transaction is expected to help deliver these targets.

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(RADIOCOR) 18-06-24 09:35:07 (0200) 5 NNNN