Aswat Asharq Al-Awsat :

Aswat Asharq Al-Awsat : Shell to Acquire Singaporean LNG firm Pavilion Energy from Temasek

Dredger Vox Maxima is anchored in the waters as workers clean up an oil slick at Siloso Beach in Sentosa, Singapore June 18, 2024. REUTERS/Edgar Su
Dredger Vox Maxima is anchored in the waters as workers clean up an oil slick at Siloso Beach in Sentosa, Singapore June 18, 2024. REUTERS/Edgar Su
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Shell to Acquire Singaporean LNG firm Pavilion Energy from Temasek

Dredger Vox Maxima is anchored in the waters as workers clean up an oil slick at Siloso Beach in Sentosa, Singapore June 18, 2024. REUTERS/Edgar Su
Dredger Vox Maxima is anchored in the waters as workers clean up an oil slick at Siloso Beach in Sentosa, Singapore June 18, 2024. REUTERS/Edgar Su

Shell has agreed to buy Singaporean liquefied natural gas (LNG) company Pavilion Energy from global investment company Temasek in a move the oil major said will strengthen its leadership position in LNG, according to statements on Tuesday.
The announcement confirmed a Reuters' report last Thursday saying Singapore's Temasek was finalizing the Pavilion Energy sale to Shell in the coming days in a deal worth hundreds of millions of US dollars.
Shell and Temasek did not disclose financial details of the sale in their statements.
The deal will provide Shell, already the world's top LNG trader, with access to gas markets in Europe and Singapore as it aggressively expands its LNG footprint after raking in billions in profits last year.
It includes Pavilion Energy's 6.5 million metric tons per annum (mtpa) of LNG supply contracts from suppliers such as Chevron, BP and QatarEnergy sourced from US liquefaction facilities such as the Corpus Christi Liquefaction, Freeport LNG and Cameron LNG.
Pavilion's long-term regasification capacity of approximately 2 mtpa at UK's Isle Grain LNG terminal, its regasification access in Singapore and Spain, and its LNG bunkering business in Singapore, the world's largest ship refuelling port, are also included in the deal, Shell said.
Zoë Yujnovich, Shell's integrated gas and upstream director, said that the purchase will bring material volumes and additional flexibility to its global portfolio.
Shell said the acquisition will be absorbed within its cash capital expenditure guidance, which remains unchanged.
"The deal is in excess of the internal rate of return hurdle rate for Shell's integrated gas business, delivering on its 15-25% growth ambition for purchased volumes, relative to 2022," Shell said in its statement.
Shell planned to expand its LNG business by 20% to 30% by 2030, compared with 2022, and this deal is expected to help deliver these targets, it added.
Shell expects global demand for LNG to rise by more than 50% by 2040 as coal-to-gas switching gathers pace in China, South Asian and Southeast Asian countries.
The deal came just over a decade after Temasek established Pavilion Energy to address the growing demand for energy in Asia and support the energy transition.
"We believe Shell is well positioned to grow Pavilion Energy's business and strengthen its global LNG hub in Singapore," Juliet Teo, Temasek's head of portfolio development group and head of Singapore market, said in its statement.
Temasek will retain its wholly owned unit Gas Supply Pte Ltd (GSPL), which imports piped natural gas from South Sumatra in Indonesia, Temasek's statement showed.
Pavilion Energy's pipeline gas contracts with customers in the power sector are also not part of the transaction and will be novated to GSPL, prior to completion, according to both statements.
Moreover, Pavilion Energy's 20% interest in Blocks 1 and 4 in Tanzania will not be included in the deal.
The transaction is expected to complete by first quarter of next year, subject to regulatory approvals, according to both statements.
Pavilion will continue to operate as a separate and independent business until the transaction is completed, according to a Temasek spokesperson.



Aswat Asharq Al-Awsat : Oil Holds its Ground as Chinese Demand Concerns Weigh

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Holds its Ground as Chinese Demand Concerns Weigh

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil held its ground on Monday as downward pressure from concern about demand in top importer China offset support from strong demand elsewhere, OPEC+ supply restraint and geopolitical tensions in the Middle East.

The reaction of the wider markets to the attempted assassination of former US President Donald Trump was in focus. The US dollar steadied after gains earlier in the session that had weighed on oil, Reuters reported.

Brent crude futures were up 3 cents at $85.06 a barrel by 1326 GMT. US West Texas Intermediate crude gained 7 cents to $82.28.

"Chinese data including refinery runs and crude imports are not supportive," said UBS analyst Giovanni Staunovo. "But demand growth elsewhere is still healthy."

Crude fell last week after four weeks of gains as hopes of strong US summer demand were countered by concern over demand in China.

Chinese data on Monday added to that concern. The world's second-largest economy grew by 4.7% in the April to June quarter, official figures showed, the slowest growth since the first quarter of 2023.

On Friday separate figures showed China's crude oil imports fell 2.3% in the first half of this year.

However, the volatile situation in the Middle East continues to provide a geopolitical premium for oil, though ample spare capacity held by Saudi Arabia and other members of OPEC has limited price support, analysts say.

"Geopolitical tensions in the Middle East, including volatile Israel-Hamas clashes and stalled peace talks, could remain a driving factor for oil prices due to concerns over regional stability," said George Pavel, general manager at Capex.com Middle East.

The oil market is also broadly underpinned by supply cuts from the OPEC+ group of producers. Iraq's oil ministry said at the weekend that it will compensate for overproduction since the beginning of 2024.

Market sentiment was supported by a US inflation report for June that came in below expectations, raising hopes for an interest rate reduction, though challenges persisted as China’s crude imports in June declined, highlighting ongoing market difficulties, Pavel added.

Federal Reserve Chair Jerome Powell is due to speak later in the day, and is likely to be asked for his reaction to last week's subdued inflation reading.

Markets are pricing in a 96% chance the Fed will cut rates in September, up from 72% a week earlier.