Shell to Acquire Singapore’s Pavilion Energy, Expanding LNG Footprint in Asia and Europe

By Velizar Velikov, Head of M&A Database at EMIS

British oil and gas giant Shell will acquire Singaporean liquefied natural gas (LNG) company Pavilion Energy from investment firm Temasek for an undisclosed amount. The deal is estimated to be valued at over USD 2bn, according to earlier media reports.

The transaction, expected to close in the first quarter of 2025 pending regulatory approval, will significantly bolster Shell’s leadership in the LNG sector by adding substantial volumes and increasing flexibility to its global portfolio. Pavilion Energy’s LNG offtake and supply contracts will provide Shell with greater access to strategic gas markets in Asia and Europe, which will be integrated into Shell’s global LNG operations.

Established in 2013, Pavilion Energy operates a global energy business focused on LNG trading, shipping, and natural gas supply and marketing activities in Southeast Asia and Europe. The company has built a diverse portfolio of approximately 6.5 mtpa of long-term LNG supply contracts with high-quality suppliers such as Chevron, bp, and QatarEnergy. 

Additionally, Pavilion Energy holds long-term regasification capacity of about 2 mtpa at the Isle of Grain LNG terminal in the United Kingdom, as well as regasification access in Singapore and Spain. The company also time-charters five LNG vessels and operates an LNG bunkering business, with its first vessel deployed in early 2024.

Pavilion Energy’s pipeline gas business and its 20% interest in Blocks 1 and 4 in Tanzania will not be included in the transaction.

This acquisition aligns with Shell’s Energy Transition Strategy, which aims to grow its LNG business by 20-30% and increase purchased LNG volumes by 15-25% by 2030, compared to 2022 levels. The Pavilion Energy acquisition is expected to contribute significantly toward achieving these targets.

In May 2024, Shell announced the sale of its Singaporean oil and chemical division to Indonesian petrochemical producer Chandra Asri Petrochemical and Swiss commodity trading company Glencore, in a deal valued at up to USD 1 billion.

Temasek, owned by the Singaporean government, is a global investment firm managing a diverse portfolio valued at approximately USD 288 billion as of 2024.

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