Shell finalises acquisition of Pavilion Energy

Shell has finalised its acquisition of Pavilion Energy from Temasek Holdings, enhancing its position in the global liquefied natural gas (LNG) market.

The deal includes Pavilion Energy's LNG trading business, which manages approximately 6.5 million tonnes per annum (mtpa) in long-term sale and supply contracts. These agreements involve partnerships with major suppliers such as bp, Chevron, and QatarEnergy.

Additionally, Shell gains access to regasification capacities of approximately 2 mtpa at the Isle of Grain LNG terminal in the UK, as well as further capacities in Singapore and Spain. The acquisition also includes shipping assets, such as time-charters for three M-type, Electronically Controlled Gas Injection (MEGI) LNG vessels and two Tri-Fuel Diesel Electric (TFDE) vessels. Pavilion's LNG bunkering business, which launched its first vessel in early 2024, is also part of the deal.

Excluded from the transaction are Pavilion Energy's pipeline gas business, which will transfer to Gas Supply Pte Ltd, a Temasek subsidiary, and its 20% stake in Tanzanian gas blocks 1 and 4.

Zoë Yujnovich, Shell's Integrated Gas and Upstream Director, stated, "The acquisition of Pavilion Energy will strengthen Shell’s leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio."

This move aligns with Shell's strategy to expand its LNG business by 20-30% by 2030, in response to a projected 50% increase in global LNG demand by 2040.

The integration of Pavilion Energy's assets is expected to enhance Shell's supply capabilities in key Asian and European markets, reinforcing Singapore's role as a global LNG trading hub.

Shell's acquisition of Pavilion Energy marks a significant step in its efforts to meet rising global LNG demand and support the transition to cleaner energy sources.