Shell, Saudi Aramco in Price Negotiations to Buy Pavilion Energy Assets- Al Arabiya
Shell and Saudi Aramco, which are competing to buy the assets of Pavilion Energy, are now in price negotiations after completing the due diligence process, according to three informed resources, reported Al Arabiya.
Pavilion Energy is a Temasek-owned liquefied natural gas trading (LNG) company in Singapore, which established Pavilion Energy to focus on LNG-related investments.
The sale comes ten years after the establishment of Pavilion Energy and two sources said the assets could fetch more than $2 billion.
Aramco believes that the deal will make it a global player in the liquefied natural gas sector. It is accelerating its gas exploration operations, and aims to increase production by more than 60% from 2021 levels by 2030, according to Reuters.
Aramco is also looking to invest in liquefied natural gas projects abroad, after buying a minority stake last year in MidOcean Energy for $500 million.
LNG trading accounted for nearly third of Shell’s profits in the fourth quarter of last year. The company, the world’s largest LNG trader, has operations around the world that allow it to take advantage of regional shifts in demand and pricing.
Shell said it believes that gas and liquefied natural gas will play a crucial role in the energy transition by replacing coal, which is more polluting to the environment, in power plants.
As one of four companies appointed by the Energy Market Authority of Singapore to import LNG, Pavilion Energy supplies third of Singapore’s power and industrial gas needs through LNG and pipelined natural gas, according to its website. The company also supplies LNG to ships in Singapore.
The company invested about $1.3 billion in three gas sites in Tanzania in 2013, shortly after its establishment. It was able to reach Europe through its purchase of Iberdrola’s liquefied natural gas assets, in 2019, including regasification services in the United Kingdom and Spain.
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