Shell Plc has agreed to purchase the LNG trader, and acquisition of Pavilion Energy Pte. This purchase represents the oil company’s latest commitment to the continued growth in demand for this fuel.
The Pavilion Energy transaction and acquisition
With this transaction, Shell will consolidate its assets, reaffirming its position as the world’s largest player in the LNG market. This strategic move will sustain the demand for LNG is growing at a faster rate than other fossil fuels. Energy majors such as Shell and Chevron argue that gas will play a more important role as a cleaner option.
The deal involves Shell acquiring all the shares of Pavilion, currently held by Temasek Holdings Pte, a Singapore state-owned investment firm. According to Pavilion’s statement, Temasek expects the transaction to be completed in the first quarter of 2025, although no further financial details were disclosed.
Pavilion Energy, a unit of Temasek, is engaged in the marketing and shipment of trading and shipping of LNG in Asia in Asia and Europe. Its portfolio includes long-term contracts for approximately 6.5 million tons per year, equivalent to about one-tenth of Shell’s total LNG sales last year, which amounted to 67 million tons. In addition, Pavilion has licenses to import fuel to Singapore and access to terminals in Spain and the United Kingdom.
Shell’s capacity
Barclays Plc highlighted that Shell is one of the few companies able to absorb and optimize LNG volumes, adjusting to demand fluctuations in different regions. With the largest gas liquefaction and marketing portfolio among the energy majors, Shell meets nearly one-fifth of global demand. Global LNG demand is expected to increase by more than 50% by 2040.
Shell’s head of gas and upstream, Zoe Yujnovich, said that this acquisition will further strengthen the company’s leading position in the LNG market. Shell plans to expand its LNG business by 30 percent by 2030 compared to 2022 levels, consolidating its long-term strategy in the energy sector.
In addition, Temasek will retain ownership of Gas Supply Pte, which imports piped gas from South Sumatra in Indonesia, as well as Pavilion’s interest in gas blocks in Tanzania.
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Source: Shell
Photo: Shutterstock
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