Singapore’s Temasek Holdings is finalizing the sale of certain assets from its liquefied natural gas (LNG) trading firm, Pavilion Energy, to Shell, with the deal expected to close imminently.
Although the exact value of the deal is in the hundreds of millions of U.S. dollars, it falls short of the more than $2 billion initially sought by Temasek. Both companies, along with Pavilion Energy, have declined to comment on the deal, Reuters reports.
According to Reuters, Pavilion Energy, established by Temasek a decade ago, has been profitable, turning in a profit of $438 million for the year ending March 2023, with revenues up 38% to $9.09 billion. The company is a key player in Singapore’s energy sector, supplying one-third of the city-state’s power and industrial gas demand.
In Europe, Pavilion Energy imports a significant portion of LNG volumes into Spain, contributing to Europe’s efforts to reduce reliance on Russian gas following the Ukraine conflict. The sale excludes Gas Supply Pte Ltd, which imports natural gas by pipeline from Indonesia, due to energy security concerns.
Shell, already the world’s top LNG trader, will significantly expand its LNG footprint through this acquisition, which aligns with its broader market growth ambitions. Shell supplies a quarter of Singapore’s natural gas needs and will become the largest supplier in the city-state following this deal, Reuters notes.
