Shell Eastern Trading has completed the acquisition of Pavilion Energy, enhancing its presence in the liquefied natural gas (LNG) sector. This purchase includes Pavilion Energy’s LNG portfolio, which features a contracted supply volume of approximately 6.5 million tonnes per annum (mtpa).
Integrating Pavilion Energy’s assets—such as LNG offtake and supply agreements, regasification capacity, and an LNG bunkering operation—aligns with Shell’s goal to boost LNG sales by 4–5% each year until 2030. The integration process will commence immediately.
The acquired assets include long-term regasification capacity of about 2 mtpa at the Isle Grain LNG terminal in the UK, along with regasification access in Singapore and Spain. The deal also involves the time-charter of three M-type, electronically controlled gas injection LNG vessels and two tri-fuel diesel electric vessels, as well as Pavilion Energy’s LNG vessel, which was deployed in early 2024.
However, Pavilion Energy’s pipeline gas operations in Singapore were excluded from this transaction and have been transferred to Gas Supply, a wholly-owned subsidiary of Temasek. Additionally, Pavilion Energy’s 20% interest in Tanzania’s blocks 1 and 4 was not included in the agreement.
Global demand for LNG is projected to rise by over 50% by 2040, driven by the rapid shift from coal to gas in China and countries in South Asia and Southeast Asia. Shell’s LNG Outlook 2024 indicates that these regions are expected to increase their LNG consumption to support economic development.
Shell aims to grow its LNG business by 20–30% by 2030 compared to 2022, with purchased LNG volumes anticipated to rise by 15–25% relative to 2022. In 2021, British oil giant bp entered into a ten-year LNG supply agreement with Pavilion Energy Trading & Supply, a subsidiary of Pavilion Energy based in Singapore.
Source: Shell Global
