Shell to UP LNG Activity with Gasnor Acquisition
The purchase will be completed for $74 million (USD) (NOK 455.5 million) and is expected to be completed within the third quarter of this year.
Shell says the deal marks an important step for the company's move into the liquefied natural gas (LNG) sales business as well as diversifying the the company's commercial customer fuel mix. Shell says Gasnor's experience in LNG sales and marketing will be bolstered by its own customer reach in Europe, allowing it "to target European marine customers ahead of new environmental regulations that will come into force from 2015".
These new regulations, which apply across the Baltic Sea, English Channel and North Sea, will impose rules on the levels of emissions permissible in those areas. LNG will help customers to meet those lower emission levels, Shell says.
"Shell expects European marine LNG to be a key growth sector as customers look for cleaner, cost competitive fuel alternatives as part of their fuel supply mix," a statement from the company said today.
The company says that it expects LNG to be a fast-growing market in the coming years with the Gasnor acquisition helping Shell to enter and develop its LNG operations strongly and quickly.
"Shell believes the Liquefied Natural Gas (LNG) in transport sector will develop into a sizeable market and given its industry leading expertise across the LNG value chain, the extension into this market is a good fit for Shell," Colin Abraham, Shell’s Vice President for Downstream LNG, said.
"The Gasnor acquisition provides Shell with invaluable customer and market insight built up over a number of years. This will help us to quickly develop and meet customer requirements for LNG as a transport fuel."
Gasnor today also welcomed the acquisition saying the deal could help both companies to grow on the LNG market.
"Shell’s customer reach and Gasnor’s LNG sales and marketing experience is a winning combination," Eilef Stange, Gasnor’s Chief Executive Officer, said: "There is real growth potential for small scale LNG in Europe, particularly in the marine sector, and Gasnor with Shell is well placed to capitalise on this."
In a separate statement released on its website today, Gasnor said that it was excited about the deal. The statement also said that Gasnor would retain its corporate identity following the acquisition, becoming a subsidiary of AS Norske Shell.