Singapore - Shell Eastern Trading Pte. Ltd., a subsidiary of the Dutch energy giant Shell plc, has completed its full acquisition of Singapore-based natural gas supplier Pavilion Energy Pte. Ltd., further solidifying its position in the liquefied natural gas (LNG) trading sector.
Pavilion Energy holds LNG supply contracts for approximately 6.5 million tonnes per annum (mtpa). Through this acquisition, Shell gains Pavilion Energy's portfolio of LNG offtake and supply agreements, regasification capacity, and its LNG bunkering business, including around 2 million tonnes of capacity at the Isle of Grain LNG terminal in the United Kingdom.
This acquisition aligns with Shell's recently revised business priorities, which include a target to increase LNG sales by 4-5% annually until 2030.
The deal, finalized today, was initially agreed upon in June 2024. Shell acquired Pavilion Energy from Carne Investments Pte. Ltd., an indirect subsidiary of Singapore's state-owned investment firm Temasek Holdings.
Notably, Pavilion Energy's 20% stake in Tanzania Blocks 1 and 4 was not included in this transaction.
Shell, through its previous acquisition of BG Group, holds Singapore's first LNG import license and currently supplies approximately a quarter of the nation's natural gas demand.
According to Shell's "LNG Outlook 2025," global LNG demand is projected to rise by about 60% by 2040. This increase is largely attributed to economic growth in Asia, efforts to reduce carbon emissions in heavy industry and transportation, and the growing impact of artificial intelligence (AI).
Industry forecasts indicate that global LNG demand could reach between 630 and 718 million tonnes per year by 2040, an upward revision from previous estimates.
However, in 2024, global LNG trade volume saw its lowest annual increase in a decade, growing by only 2 million tonnes to 407 million tonnes, due to constraints in new supply development.
In a separate development, Shell Singapore Pte Ltd yesterday completed the sale of its Energy and Chemicals Park in Singapore to CAPGC Pte. Ltd., a joint venture between Chandra Asri Capital Pte. Ltd. and Glencore 1 Asian Holdings Pte. Ltd.
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