Shell and Saudi Aramco in a Tug-of-War for Pavilion Energy

Posted by John Donovan: 5 March 24

Oh, what do we have here? The corporate gladiators, Shell and Saudi Aramco are sharpening their swords, ready to dive into the lavish feast of Pavilion Energy’s assets, served by Singapore’s very own Temasek. It’s a spectacle worthy of the Colosseum, as these energy behemoths get shortlisted to gobble up most of what Pavilion Energy has on offer, minus the gas pipeline business because, let’s be real, that’s just the side dish no one’s really eyeing at this banquet.

The stage for this grand dinner was set a decade ago when Temasek decided it was a good idea to whip up Pavilion Energy, focusing on the ever-so-appetizing liquefied natural gas (LNG) investments. Fast forward to today, and the spotlight’s on Asian LNG prices, which have taken a plunge deeper than a gossip magazine’s credibility, falling over 40% since last summer. Talk about perfect timing, right? This dip could be the lemon squeeze that makes the deal a tad sour for Temasek.

As the final round of bidding looms over us like the climax of a reality TV show, everyone’s on the edge of their seats waiting to see if the price will indeed be right. Details on the bids are shrouded in mystery, much like the secret recipe to your grandma’s lasagna.

Bloomberg had its moment of fame, breaking the news about this sale saga back in August 2023, and since then, it’s been a whirlwind of “no comments” from all parties involved. Yes, you guessed it—Temasek, Shell, and even Barclays, the supposed advisor in this grand sale, have all zipped their lips tighter than a miser’s purse.

And just when you thought the plot couldn’t thicken any further, enter Pavilion Energy’s financials. From a loss that could make your eyes water to a profit that’ll have you seeing green, it’s been a rollercoaster. Not to forget, this firm is no small fish, supplying a hefty chunk of Singapore’s power and industrial gas needs, and even playing a pivotal role in Europe’s LNG market.

For Shell, this deal is like getting an extra scoop of ice cream. Already the world’s top LNG trader and a significant player in Singapore’s market, snatching Pavilion would be the cherry on top. Meanwhile, Aramco, seemingly late to the party but with pockets deeper than the Mariana Trench, is looking to crash the LNG bash, elbowing its way through to grab a piece of the action.

So, as this tale of corporate hunger games unfolds, one can’t help but sit back, popcorn in hand, and marvel at the lengths these giants will go to in their relentless pursuit of more. Shell and Aramco, in their quest for dominance, remind us all that in the end, it’s all about who has the bigger appetite.

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