Pavilion Energy buying Spanish utility firm's LNG assets for $176m

Pavilion Energy group chief executive Frederic Barnaud (far left) and Mr Aitor Moso, chief executive of liberalised business at Iberdrola, after signing the deal. PHOTO: PAVILION ENERGY
Pavilion Energy group chief executive Frederic Barnaud (far left) and Mr Aitor Moso, chief executive of liberalised business at Iberdrola, after signing the deal. PHOTO: PAVILION ENERGY

Pavilion Energy is acquiring the liquefied natural gas (LNG) assets of a Spanish utility firm, it announced yesterday.

A wholly owned Pavilion subsidiary will pay €115 million (S$176 million) for the assets, according to official filings in Spain.

The deal's final valuation is subject to several adjustments stipulated in the contract, with the sale due to be closed by Jan 1 next year.

Pavilion Energy - a Temasek unit - is buying the LNG assets from Iberdrola, one of the world's biggest electricity utilities by market capitalisation.

The group is present in many countries and supplies energy to over 100 million people, mainly in Spain, Britain, the United States, Brazil and Mexico. It is leading the transition towards a sustainable energy model through investments in renewable energy, smart grids, large-scale energy storage and digital transformation.

The portfolio Pavilion Energy is buying comprises about four million tonnes per annum of Iberdrola's long-term sale and supply LNG contracts.

It includes long-term regasification of about two million tonnes per annum at a British terminal, regasification access in Spain and the Spanish-France border pipeline capacity, as well as the time-charter of a newbuild LNG vessel.

Both parties have also concluded an agreement for Pavilion Energy to supply natural gas in Spain to Iberdrola Generacion Espana.

Pavilion Energy group chief executive Frederic Barnaud said: "This acquisition brings us a portfolio of prime assets primarily in Europe and the Atlantic Basin. Today is a critical step towards our vision to be a leading global LNG player, leveraging our LNG portfolio with deep access to strategic gas markets in Singapore, Spain and the UK."

Pavilion said the new portfolio will allow it to offer more flexibility and competitive offerings for customers here and boost its position as a Singapore-based LNG trader.

Pavilion Energy supplies one-third of Singapore's downstream natural gas demand. It is an advocate of natural gas as a cleaner fuel for power generation and industrial use, and as bunkering fuel. It has also become a provider of liquidity to financial LNG and gas indexes and a partner for energy risk management and hedging solutions.

A version of this article appeared in the print edition of The Straits Times on June 21, 2019, with the headline 'Pavilion Energy buying Spanish utility firm's LNG assets for $176m'. Print Edition | Subscribe