Singapore's state-owned investment funds manager Temasek has narrowed down potential buyers for assets of its LNG trading arm Pavilion Energy to energy titans Shell and Saudi Aramco, reported Reuters.

The sale, however, excludes Pavilion Energy's gas pipeline business.

A final round of bidding is expected soon, with a decision contingent on the offers meeting Temasek's valuation criteria.

The exact number of bids and their financial details were not disclosed.

The sale coincides with a period where spot Asian LNG prices have dropped by more than 40% since mid-August, potentially impacting the valuation of the deal.

Bloomberg News initially reported the sale process in August 2023.

At that time, Temasek was seeking a valuation of at least $2bn for these assets.

An industry source was quoted by Reuters as saying: "Pavilion Energy has a decent portfolio from a long-term volumes perspective, so it would be a good opportunity for Aramco to enter the LNG business. For Shell, it would further expand their massive portfolio.”

One of the sources said that Saudi Aramco has been seeking opportunities and the acquisition would boost its LNG business.

“Aramco is late to the LNG party, but they have the money to catch up,” the source noted.

Shell, one of two LNG importers in Singapore, would see its market share in the city-state grow with this acquisition.

Pavilion Energy has global energy business comprising natural gas supply and marketing activities in South East Asia and Europe; global LNG trading, shipping and optimisation; and energy hedging and financial solutions.