World News
Shell Buys LNG Assets in Latin America, Spain
Royal Dutch Shell Plc. (Shell) is expanding its liquefied natural gas (LNG) business in Latin America and Spain with a $6.7 billion deal with Spanish oil company Repsol SA (Repsol), Bloomberg reports.
Repsol sold LNG import and export assets to Shell, which is already the largest supplier of the fuel, for $4.4 billion in cash.
As Shell will take over financial leases and assume debt as part of the deal, the transaction’s total value is $6.7 billion.
Analysts said the deal helps Shell trade LNG among its facilities around the world, with new long-term offtake contracts and more flexibility to trade in the spot market.
"We are generally bullish on the LNG market through the end of the decade," said Jason Gammel, an analyst with Macquarie Capital Europe Ltd.
Repsol had offered its Canadian Canaport terminal, which imports gas into North America, for sale, but it was not included in the deal and will be written down for $1.3 billion.
The terminal had 25-year commitments for North American gas imports, which was seen as a hurdle to its sale since the continent is developing strong domestic production from its shale fields.
Shell has said it plans to expand its sales of LNG for marine fuel and other transportation purposes, and it is involved in plans to export the fuel from the U.S. and Canada.
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