Shell Strengthens LNG Position with Pavilion Energy Acquisition

Shell PLC, the London-based oil and gas exploration giant, has completed its acquisition of Pavilion Energy Pte Ltd, a significant move that bolsters its position in the global liquefied natural gas (LNG) market. The deal, announced last June and finalized on April 2, 2025, includes Pavilion Energy’s extensive portfolio of LNG offtake and supply contracts, regasification capacity, and LNG bunkering business. This strategic acquisition aligns with Shell’s ambition to grow its LNG sales by 4-5% per year through 2030, solidifying its leadership in the LNG sector.



The acquisition of Pavilion Energy, headquartered in Singapore, brings with it a contracted supply volume of approximately 6.5 million tonnes per annum (mtpa). This addition to Shell’s portfolio includes long-term regasification capacity of around 2 mtpa at the Isle Grain LNG terminal in the United Kingdom, as well as regasification access in Singapore and Spain. Additionally, Pavilion Energy’s fleet includes the time-charter of three M-type, electronically controlled gas injection (MEGI) LNG vessels and two tri-fuel diesel electric (TFDE) vessels, further enhancing Shell’s LNG bunkering capabilities.

Shell’s acquisition of Pavilion Energy is a strategic move that aligns with its broader goals of growing its LNG sales by 4-5% per year through 2030. The integration of Pavilion Energy’s assets into Shell’s global LNG portfolio will commence immediately, allowing Shell to leverage these assets to grow its LNG sales and solidify its leading position in the LNG market. This acquisition is expected to be absorbed within Shell's cash capital expenditure guidance, ensuring that it does not disrupt the company’s financial stability.

The acquisition also includes Pavilion Energy’s LNG bunkering business, which has its first vessel deployed in early 2024. This further solidifies Shell's presence in Singapore, the world's largest bunkering hub, and supports its projection of global LNG bunker demand reaching 16 million mt/year by 2030. The integration of Pavilion Energy’s assets into Shell’s global LNG portfolio will commence immediately, allowing Shell to leverage these assets to grow its LNG sales and solidify its leading position in the LNG market.



While the acquisition presents numerous advantages, it also comes with potential risks and challenges. Integrating Pavilion Energy’s operational systems and processes into Shell’s existing framework will require careful planning and execution. Regulatory compliance in multiple jurisdictions, including the United Kingdom, Singapore, and Spain, will also be a significant challenge. Additionally, the LNG market is subject to fluctuations in supply and demand, as well as geopolitical risks, which could affect Pavilion Energy’s portfolio of long-term sale and supply LNG contracts.

To mitigate these risks, Shell can take several steps, including developing a comprehensive integration plan, engaging with all stakeholders, implementing a system for continuous monitoring and adaptation, and providing training and development opportunities for employees. By taking these steps, Shell can ensure a smooth transition and maximize the benefits of the acquisition.

In conclusion, Shell’s acquisition of Pavilion Energy is a strategic move that aligns with its broader goals of growing its LNG sales by 4-5% per year through 2030. The acquisition brings with it a significant addition to Shell’s contracted supply volume, regasification capacity, and LNG bunkering capabilities, further solidifying its leading position in the LNG market. While the acquisition presents potential risks and challenges, Shell’s experience in integrating diverse assets into its global portfolio can help mitigate these risks and ensure a smooth transition.