Shell’s subsidiary, Eastern Trading Pte. Limited, has signed a deal with Carne Investments Pte. Limited, an indirect wholly owned subsidiary of Temasek to acquire 100% of the shares in Pavilion Energy Pte. Ltd.

The agreement, expected to be completed in the first quarter of 2025 subject to regulatory approvals, confirms Shell’s goal to strengthen its global LNG portfolio.

Pavilion Energy includes a global liquefied natural gas (LNG) trading business with a contracted supply volume comprising about 6.5 million tons per annum (mtpa).

Headquartered in Singapore, Pavilion Energy’s global energy business encompasses LNG trading, shipping, natural gas supply and marketing activities in Asia and Europe.

“The acquisition of Pavilion Energy will strengthen Shell’s leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.

“We will acquire Pavilion’s portfolio of LNG offtake and supply contracts, which includes additional access to strategic gas markets in Asia and Europe. 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,” Yujnovich added.

The acquisition will be absorbed within Shell’s cash capital expenditure guidance, which remains unchanged, shell noted in a press release.

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.