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    Temasek sells Pavilion Energy to Shell


Pavilion Energy operates in Singapore and Europe, marketing and trading LNG in Europe and Asia to a range of customers and counterparties.

by: Shardul Sharma

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Natural Gas & LNG News, Asia/Oceania, Europe, Liquefied Natural Gas (LNG), Corporate, News By Country, Singapore

Temasek sells Pavilion Energy to Shell

Carne Investments, an indirect wholly-owned subsidiary of Singapore’s Temasek, has reached an agreement to divest 100% of its shares in LNG company Pavilion Energy to Shell Eastern Trading, a subsidiary of Shell, the companies announced on June 18.

Pavilion Energy, established in 2013, operates in Singapore and Europe, marketing and trading LNG in Europe and Asia to a range of customers and counterparties. It holds a portfolio of approximately 6.5mn tonnes/year of LNG supply contracts from suppliers including Chevron, BP, and QatarEnergy. The contracts also encompass Iberdrola’s LNG asset portfolio, acquired by Pavilion Energy in 2019, and offtake agreements from US liquefaction facilities at Corpus Christi Liquefaction, Freeport LNG, and Cameron LNG.

Its portfolio also includes long-term regasification capacity of approximately 2mn tonnes/year at the Isle of Grain LNG terminal (UK), regasification access in Singapore and Spain, marine bunkering business as well as the time-charter of three M-type, electronically controlled gas injection LNG vessels, two tri-fuel diesel electric vessels, and one LNG bunkering vessel.

“We believe Shell is well positioned to grow Pavilion Energy’s business and strengthen its global LNG hub in Singapore,” said Juliet Teo, Head of Portfolio Development Group and Head of Singapore Market at Temasek.

The transaction, subject to regulatory approvals, is expected to be completed by Q1 2025. Temasek and Shell have not disclosed the financial details of the sale.

“We will acquire Pavilion’s portfolio of LNG offtake and supply contracts, which includes additional access to strategic gas markets in Asia and Europe,” said Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director, in a separate statement. “By integrating these into Shell’s global LNG portfolio, Shell is strongly positioned to deliver value from this transaction while helping to meet the energy security needs of our customers.”

The acquisition will be absorbed within Shell’s cash capital expenditure guidance, which remains unchanged. The deal is in excess of the internal rate of return (IRR) hurdle rate for Shell’s Integrated Gas business, delivering on its 15-25% growth ambition for purchased volumes, relative to 2022, as outlined during the 2023 Capital Markets Day, it said. 

Pavilion Energy’s pipeline gas business will not be part of the transaction and will be transferred to Gas Supply (GSPL), a wholly-owned subsidiary of Temasek, prior to completion. Similarly, its 20% shareholding in blocks 1 and 4 in Tanzania is excluded from the deal.

Shell plans to grow its LNG business by 20-30% by 2030 compared to 2022, with purchased LNG volumes expected to increase by 15-25% relative to 2022, as outlined in the 2023 Capital Markets Day. This transaction is anticipated to support these targets, Shell stated.

Through its acquisition of BG, Shell holds the first LNG importing license to Singapore and supplies nearly a quarter of the country’s natural gas needs.