Energy major Shell has inked a deal to buy the shares of Singapore’s Pavilion Energy business as the company plans to grow its LNG business.

The major said on Tuesday that its subsidiary Shell Eastern Trading had reached an agreement with Carne Investments, an indirect wholly-owned subsidiary of Temasek, to acquire 100% of the shares in Pavilion Energy.

The energy firm said Pavilion Energy includes a global liquefied natural gas (LNG) trading business with a contracted supply volume comprising about 6.5 million tonnes per annum, along with shipping, natural gas supply and marketing activities in Asia and Europe.

Shell plans to grow its LNG business by 20-30% by 2030, compared with 2022, and purchased LNG volumes are planned to grow by 15-25%, relative to 2022, as outlined in the 2023 Capital Markets Day.

This transaction is expected to help deliver these targets, the company said.

“The acquisition of Pavilion Energy will strengthen Shell’s leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.

The deal is expected to be completed by the first quarter of 2025, subject to regulatory approvals.

No financial details were disclosed by Temasek and Shell.

The company said the acquisition will be absorbed within Shell’s cash capital expenditure guidance, which remains unchanged.

Pavilion Energy’s portfolio comprises about 6.5 mtpa of its long-term sale and supply LNG contracts.

It also includes long-term regasification capacity of about 2 mtpa at the Isle Grain LNG terminal in the UK, regasification access in Singapore and Spain, as well as the time-charter of three M-type, electronically controlled gas injection (MEGI) LNG vessels, and two tri-fuel diesel electric (TFDE) vessels.

It also has an LNG bunkering business with its first vessel deployed in early 2024.

Pavilion Energy’s pipeline gas business is not included as part of the transaction and will be transferred to Gas Supply Pte Ltd (GSPL), a wholly-owned subsidiary of Temasek, prior to completion.

Pavilion Energy’s 20% shareholding in block 1 and 4 in Tanzania are not included in the transaction, the company added.