Shell completes purchase of Singapore LNG trader Pavilion from Temasek

SINGAPORE – Global energy giant Shell said on April 1 that it has completed the acquisition of Singapore’s liquefied natural gas (LNG) company Pavilion Energy from Temasek.

The agreement to purchase the LNG trader was announced on June 18, 2024. Shell did not disclose the dollar value of the acquisition.

Shell, already the world’s top LNG trader, acquired Pavilion Energy’s global LNG trading business, including long-term sale and supply contracts totalling 6.5 million tonnes per annum, regasification capacity and its LNG bunkering business.

“This acquisition helps deliver on Shell’s ambition to solidify its leading position in LNG by growing sales by 4 per cent to 5 per cent per year through to 2030,” the company said in a statement.

The integration of Pavilion’s assets into Shell’s global LNG portfolio will commence immediately, it added.

Energy experts believe the purchase of Pavilion will also help Shell dominate the world’s largest LNG bunkering hub – Singapore – by broadening its customer base and market presence across the Asia-Pacific.

Pavilion had been actively contributing to Singapore’s burgeoning LNG bunkering ecosystem.

Since receiving its LNG bunker supplier licence in 2016, Pavilion has bunkered more than 280 truckloads of LNG and launched its first ship-to-ship LNG bunkering operation in February 2024.

For Singapore, the integration of Shell’s and Pavilion’s LNG bunkering businesses is expected to further cement the Republic’s pre-eminent status in LNG trading and bunkering, given Shell’s strong portfolio and global reach.

Shell already holds the largest gas liquefaction and marketing portfolio among global energy majors, meeting almost a fifth of worldwide demand. Global LNG demand is expected to rise by more than half by the end of 2040.

Pavilion Energy’s portfolio also includes long-term regasification capacity of about two million tonnes per annum at the Isle Grain LNG terminal in Britain and regasification access in Singapore and Spain.

Pavilion also has time-charter agreements for three m-type, electronically controlled gas injection LNG vessels and two tri-fuel diesel electric vessels.

Pavilion’s pipeline gas business in Singapore was not included as part of the transaction and has been transferred to Gas Supply Pte Ltd, a wholly owned subsidiary of Temasek, which imports piped gas from South Sumatra in Indonesia.

Also excluded from the purchase was Pavilion’s stake in two offshore oil and gas blocks in Tanzania.

Shell, through its acquisition of BG Group, holds the first LNG importing licence to Singapore, supplying nearly a quarter of the country’s natural gas needs.

“For more than 10 years, Shell has delivered LNG to Singapore and other markets in Asia reliably and competitively, trading in LNG, crude, oil products and other energy commodities to serve customers across Asia, actively contributing to the region’s energy supply security,” the firm said.

Singapore uses natural gas piped from neighbouring countries or shipped as LNG to produce electricity.