Shell's acquisition of Pavilion's LNG assets strengthens Singapore's position as a global LNG hub

The recent acquisition of Pavilion's LNG assets by Shell is expected to strengthen Singapore's position as a global LNG trading and bunkering hub, according to analysis by Wood Mackenzie. 

“The acquisition will position Shell as the main user of the Singapore LNG (SLNG) terminal,” says Johnson Quadros, Head of Asia Gas &LNG Research at Wood Mackenzie. “With Shell’s strong presence and experience in LNG, the deal is anticipated to diversify Singapore’s LNG supply sources, enhance its energy security, and solidify Singapore's status as an LNG trading hub.” 

This move is also deemed strategic for Shell in enhancing its supply chain capabilities and thereby ensuring a consistent supply of LNG to meet the increasing demand for cleaner marine fuels in the region. “Given Shell's extensive portfolio and global reach, the integration of the LNG bunkering business is also expected to enhance Singapore's LNG bunkering capabilities, in which the city-state is among the global leaders,” says Fadhlullah Omarali, Principal Analyst at Wood Mackenzie. 

“However, there are uncertainties on the Singapore gas market’s structure after this transition, particularly concerning Shell's operations under the impending establishment of a single gas buyer for the power sector under the Central Gas Entity (CGE) scheme. Clarity on these matters is expected once the government passes the amended Gas Act in the coming months,” adds Li Yulin, Research Associate, Gas & LNG at Wood Mackenzie.