Shell Eastern Trading Pte. Ltd., a subsidiary of Shell plc, has officially completed its acquisition of Pavilion Energy Pte. Ltd., to strengthen Shell's position as a global leader in the liquefied natural gas (LNG) market. The acquisition was initially announced on June 18, 2024 and completed on April 1.

The acquisition, valued at an undisclosed sum and absorbed within Shell's existing capital expenditure guidance, encompasses 100% of Pavilion Energy's shares. Headquartered in Singapore, Pavilion Energy operates a robust global LNG trading business, boasting a contracted supply volume of approximately 6.5 million tonnes per annum (mtpa). This substantial portfolio includes a diverse range of LNG offtake and supply contracts, crucial regasification capacity, and a burgeoning LNG bunkering business.

Key assets obtained by Shell include long-term regasification capacity of approximately 2 mtpa at the Isle Grain LNG terminal in the United Kingdom, alongside regasification access in Singapore and Spain. Furthermore, the acquisition incorporates the time-charter of five LNG vessels, comprising three modern M-type, Electronically Controlled Gas Injection (MEGI) vessels and two Tri-Fuel Diesel Electric (TFDE) vessels. Notably, Pavilion Energy's LNG bunkering business, which saw its first vessel deployed in early 2024, is also now part of Shell's portfolio.

The integration of Pavilion Energy's assets into Shell's extensive global LNG operations is set to commence immediately, promising to enhance Shell's operational efficiency and market reach. This strategic move aligns with Shell’s ambition to solidify its leadership in the LNG sector, particularly in the rapidly growing Asian market.

It is important to note that Pavilion Energy's pipeline gas business in Singapore was excluded from the transaction and has been transferred to Gas Supply Pte Ltd (GSPL), a wholly owned subsidiary of Temasek. Similarly, Pavilion Energy’s 20% interest in blocks 1 and 4 in Tanzania were not included in the transaction.

Shell’s existing footprint in Singapore, bolstered by its BG acquisition, includes the first LNG importing license, supplying nearly a quarter of the nation’s natural gas needs. With over a decade of experience delivering LNG to Singapore and other Asian markets, Shell has established itself as a reliable and competitive trader of LNG, crude oil products, and other energy commodities, contributing significantly to the region's energy security. Shell is also a pioneer in developing LNG as a marine fuel for bunkering in Singapore.

The acquisition of Pavilion Energy underscores Shell’s commitment to expanding its LNG business and capitalizing on the increasing demand for cleaner energy solutions.