Shell Eastern Trading, a subsidiary of Shell, has signed an agreement to acquire Pavilion Energy from Carne Investments, an indirect wholly owned subsidiary of Temasek.

The acquisition forms part of Shell's strategy to expand its LNG business by 20–30% by 2030 compared with the 2022 level.

Subject to regulatory approvals, the transaction is due to be completed by the first quarter of 2025.

Pavilion Energy, headquartered in Singapore, operates in both Asia and Europe, specialising in LNG trading, shipping and natural gas supply.

The company has secured a diverse supply portfolio, with contracts totalling approximately 6.5 million tonnes per annum (mtpa) from suppliers including Chevron, BP and QatarEnergy, as well as off-take agreements with major US liquefaction plants.

However, the transaction excludes Pavilion Energy's pipeline gas business, which will be transferred to Gas Supply Pte Ltd, a Temasek subsidiary, before the deal's finalisation.

It also excludes Pavilion Energy's 20% stake in  block 1 and 4 gas blocks offshore Tanzania.

Shell, through its previous BG acquisition, already plays a significant role in Singapore's LNG market, supplying nearly a quarter of the nation's natural gas.

Shell integrated gas and upstream director Zoë Yujnovich said: “The acquisition of Pavilion Energy will strengthen Shell’s leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio.

“We will acquire Pavilion’s portfolio of LNG offtake and supply contracts, which includes additional access to strategic gas markets in Asia and Europe.

“By integrating these into Shell’s global LNG portfolio, Shell is strongly positioned to deliver value from this transaction while helping to meet the energy security needs of our customers.”

Recently, Reuters reported that Temasek was nearing the completion of a deal to sell certain assets of Pavilion Energy to Shell.