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Shell, Aramco in final stage of talks to buy Temasek-owned Pavilion Energy: Sources

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on The Straits Times or enjoy below:

🗞️ Driving the news: Energy giants Shell and Saudi Aramco are in the final stages of negotiations to acquire Pavilion Energy, a Temasek-owned liquefied natural gas (LNG) trading firm
• After completing due diligence, both companies are now discussing the price of a deal that could value the assets at over US$2 billion

🔭 The context: Pavilion Energy, established by Singapore's investment company Temasek a decade ago, plays a significant role in LNG investments
• It supplies a third of Singapore's power and industrial gas demand, highlighting its strategic importance in the energy sector

🌍 Why it matters for the planet: The acquisition underlines the strategic moves by major oil companies to diversify and strengthen their positions in the LNG market, which is seen as a pivotal element in the energy transition away from coal towards less polluting alternatives
• Pavilion Energy's significant role in supplying LNG to Singapore and its investments in gas blocks and LNG assets abroad make it a valuable asset in this transition

⏭️ What's next: The acquisition would mark a significant expansion for Aramco into the global LNG market and align with Shell's position as the world's largest LNG trader
• The deal reflects the growing emphasis on gas as a key component of the global energy transition, with both companies looking to cement their roles in a lower-carbon energy future

💬 One quote: No direct quotes provided

📈 One stat: Pavilion Energy reported a profit after tax of US$438 million for the year to March 2023, reversing the previous year's loss, with revenue rising 38% to US$9.09 billion

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