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Shell Eastern Trading Pte. Ltd., a subsidiary of Shell plc, has announced an agreement with Carne Investments Pte. Ltd., an indirect wholly-owned subsidiary of Temasek, to acquire 100 percent of the shares in Pavilion Energy Pte. Ltd, Trend reports.
This acquisition includes Pavilion Energy’s global LNG trading business, with a contracted supply volume of approximately 6.5 million tonnes per annum (mtpa).
Pavilion Energy, headquartered in Singapore, operates a comprehensive global energy business encompassing LNG trading, shipping, and natural gas supply and marketing activities in Asia and Europe.
“The acquisition of Pavilion Energy will bolster Shell’s leadership in LNG, adding significant volumes and increased flexibility to our global portfolio,” stated Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director. “We will acquire Pavilion’s portfolio of LNG offtake and supply contracts, gaining additional access to strategic gas markets in Asia and Europe. Integrating these assets into Shell’s global LNG portfolio positions us to deliver substantial value from this transaction while enhancing energy security for our customers.”
The acquisition aligns with Shell’s cash capital expenditure guidance, which remains unchanged. The deal surpasses the internal rate of return (IRR) hurdle rate for Shell’s Integrated Gas business, supporting its 15-25 percent growth ambition for purchased volumes relative to 2022, as outlined during the 2023 Capital Markets Day.
The integration of Pavilion Energy’s portfolio with Shell’s will commence post-completion of the deal, expected by 1Q2025, subject to regulatory approvals and other conditions precedent.
Meanwhile, Shell aims to expand its LNG business by 20-30 percent by 2030 compared to 2022 levels. Additionally, the company plans to increase purchased LNG volumes by 15-25 percent relative to 2022, as detailed during the 2023 Capital Markets Day. This transaction is anticipated to significantly contribute to achieving these growth targets.
