Singapore's state-owned investment company, Temasek, is nearing the completion of a deal to sell certain assets of its liquefied natural gas (LNG) trading company, Pavilion Energy, to Shell, reported Reuters.

The transaction is expected to be finalised in the coming days, sources with knowledge of the matter told the news agency.

The deal is reportedly valued in the hundreds of millions of dollars, which is less than Temasek's initial asking price.

The deal is expected to provide Shell access to gas markets in Europe and Singapore as it looks to expand its LNG business.

The assets being sold, however, will not include Gas Supply, which holds a natural gas import licence by pipeline from Indonesia. This is due to energy security concerns, one of the sources said.

Barclays has been advising on the potential sale since 2023, with the stipulation that the gas pipeline business would not be included, reported Bloomberg News.

While advanced discussions are under way, no definitive agreements have been signed, and the possibility of other bidders emerging or Temasek opting to retain the assets still exists.

In April 2024, Reuters reported that Shell and Saudi Aramco were in the negotiations to acquire Pavilion Energy’s LNG trading assets, with Temasek aiming to secure more than $2bn (S$2.7bn) from the deal.

In the year to March 2023, Pavilion Energy reported profits as it capitalised on the robust LNG prices resulting from the Russia-Ukraine conflict.

Established by Temasek a decade ago with a focus on LNG investments, Pavilion Energy is a fully owned subsidiary that engages in LNG trading and shipping across Asia and Europe.