Shell and Saudi Aramco in Intense Price Negotiations for Pavilion Energy Assets
In a high-stakes battle to acquire Temasek-owned liquefied natural gas trading firm Pavilion Energy, oil giants Shell and Saudi Aramco are now engaged in intense price negotiations after completing due diligence, according to three sources familiar with the matter.
A Decade in the Making
Established by Singapore state investment firm Temasek a decade ago, Pavilion Energy has become a key player in LNG-related investments. The potential sale of its assets is estimated to be worth over $2 billion, as reported by two of the sources.
Silence Speaks Volumes
Despite the buzz surrounding the negotiations, Pavilion Energy, Temasek, Shell, and Barclays, the advisor to Temasek, have all chosen to remain silent on the matter. Saudi Aramco, whose gas unit is leading the negotiations, did not respond to requests for comment.
Aramco’s Global Ambitions
Saudi Aramco views the potential acquisition as a strategic move to solidify its position as a major player in the global LNG market. The company is ramping up its gas exploration efforts and aims to increase production by over 60% from 2021 levels by 2030.
Shell’s LNG Dominance
LNG trading plays a significant role in Shell’s profits, accounting for nearly a third of its earnings in the fourth quarter of last year. As the world’s largest LNG trader, Shell’s extensive operations worldwide allow it to capitalize on shifts in regional demand and pricing.
A Sustainable Future
Shell is confident in the role of gas and LNG in the energy transition, seeing them as key components in replacing coal in power generation. With a commitment to sustainability, Shell is positioning itself for a cleaner energy future.
Pavilion Energy’s Impact
As one of Singapore’s appointed LNG importers, Pavilion Energy supplies a significant portion of the city-state’s power and industrial gas needs. Additionally, the company is a major supplier of LNG to ships in Singapore, the world’s premier bunkering port.
Expanding Horizons
Pavilion Energy’s investments extend beyond Singapore, with ventures in Tanzania and Europe. With a focus on growth and diversification, the company has seen a turnaround in profits and revenue in recent years, showcasing its resilience and strategic vision.