Shell acquires Pavilion Energy in strategic move in global LNG market

Shell Eastern Trading Pte. Ltd., a subsidiary of Shell plc, has agreed to acquire Pavilion Energy Pte. Ltd. from Carne Investments Pte. Ltd., an indirect wholly-owned subsidiary of Temasek. The deal involves acquiring 100% of Pavilion Energy’s shares, significantly enhancing Shell’s position in the liquefied natural gas (LNG) market. Pavilion Energy is recognized for its robust LNG trading operations and has a contracted supply volume of approximately 6.5 million tonnes per annum (mtpa).

Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, highlighted the strategic benefits of this acquisition, stating, “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 global LNG footprint, giving it additional access to strategic gas markets in Asia and Europe.

The acquired assets include a diverse portfolio of LNG offtake and supply contracts and long-term regasification capacity in key locations such as the United Kingdom, Singapore, and Spain. Furthermore, Pavilion Energy’s LNG bunkering operations and its fleet of specialized LNG vessels, including three M-type, Electronically Controlled Gas Injection (MEGI) LNG vessels and two Tri-Fuel Diesel Electric (TFDE) vessels, are part of the transaction.

The global demand for LNG is projected to rise by more than 50% by 2040, driven primarily by industrial shifts from coal to gas in regions like China and Southeast Asia. Shell’s acquisition of Pavilion Energy is timely as it prepares to meet the increasing global demand and support the energy transition. Shell plans to grow its LNG business by 20-30% by 2030, and this acquisition is a step towards achieving that goal.

This acquisition does not only reinforce Shell’s market position but also supports the broader energy security needs of its customers globally. With Pavilion Energy’s assets, Shell is poised to play a pivotal role in the energy transition, contributing to reduced carbon emissions and enhanced energy security.

Shell’s strategic acquisition of Pavilion Energy underlines its commitment to leading in the global LNG market. By leveraging Pavilion’s extensive network and assets, Shell can more effectively meet the growing global demand for cleaner energy sources, marking a significant step in its growth strategy.