Shell SHEL.L has agreed to acquire Singaporean liquefied natural gas (LNG) company Pavilion Energy from global investment firm Temasek. The deal will strengthen Shell’s leadership position in the LNG market, providing the oil major with access to gas markets in Europe and Singapore as it continues to aggressively expand its LNG footprint.
The acquisition includes Pavilion Energy’s 6.5 million metric tons per annum (mtpa) of LNG supply contracts from suppliers such as Chevron CVX.N, BP BP.L, and QatarEnergy. It also includes Pavilion’s long-term regasification capacity at the UK’s Isle Grain LNG terminal, its regasification access in Singapore and Spain, and its LNG bunkering business in Singapore, the world’s largest ship refueling port.
Zoë Yujnovich, Shell’s integrated gas and upstream director, stated that the purchase will bring material volumes and additional flexibility to Shell’s global portfolio. Shell plans to expand its LNG business by 20% to 30% by 2030, and this deal is expected to help deliver these targets.
The deal comes as Shell expects global demand for LNG to rise by more than 50% by 2040, driven by coal-to-gas switching in China, South Asia, and Southeast Asia. Temasek, which established Pavilion Energy over a decade ago, believes Shell is well-positioned to grow the business and strengthen its global LNG hub in Singapore.
The transaction is expected to be completed by the first quarter of next year, subject to regulatory approvals.