Shell to buy certain LNG assets from Repsol for $4.4 billion

[Story updated, adding financial details, adding Canaport LNG supply agreement]

Royal Dutch Shell PLC agreed to acquire various liquefied natural gas assets from Repsol SA, including supply positions in Peru and Trinidad and Tobago, for $4.4 billion.

In addition, Shell will assume another $500 million in debt and $1.8 billion in lease obligations. The transaction is expected to generate $3.5 billion in pre-tax capital gain, Repsol said. The sale process excludes the Canaport regasification terminal in Saint John, NB. Repsol owns 75% interest in that terminal.

"The North American facility is not included in the sale process as the low gas prices currently seen in the US market do not allow the asset's medium and long-term potential to be adequately valued," Repsol said, adding that it was analyzing operational, financial, and strategic options for Canaport. Irving Oil owns 25% interest in Canaport.

In the meantime, Repsol and Shell have signed a 10-year agreement to supply 1 million tonnes/year to Canaport.

Shell Chief Executive Officer Peter Voser said the assets that Shell is acquiring from Repsol will increase Shell’s ability to bring LNG to areas that need it the most.

The acquisition will provide Shell with LNG capacity in the West Atlantic from Atlantic LNG in Trinidad and Tobago, and in the East Pacific from Peru LNG.

Shell has agreed to acquire holdings from several Repsol subsidiaries, subject to regulatory approvals.

These additions will complement Shell's existing LNG capacity in Africa, Asia, Australia, the Middle East, and Russia.

The acquisition is expected to add 7.2 million tonnes/year of LNG volumes through long-term off-take agreements, Shell said.

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