OIL major Royal Dutch Shell yesterday announced that it was paying $74m (£47.5m) to buy up the remaining shares of Norwegian liquid natural gas (LNG) supplier Gasnor that it does not already own.
The company holds 4.1 per cent of the stock but has signed a share purchase agreement which should see it take ownership of the rest by the third quarter.
The company said the deal was an important step towards creating an LNG sales business, and would offer a reliable new addition to Shell's commercial customers’ fuel mix. Gasnor supplies LNG to industrial and marine customers, with three small scale production plants and distribution assets including two tanker ships, a fleet of trucks and a network of terminals. Through this acquisition, Shell will capitalise on Gasnor’s experience in LNG sales and marketing, combining it with its own customer reach to target European marine customers ahead of new environmental regulations that will come into force from 2015
Colin Abraham, Shell’s vice president for Downstream LNG, said: “Shell believes the Liquefied Natural Gas (LNG) in transport sector will develop into a sizeable market and given its industry leading expertise across the LNG value chain, the extension into this market is a good fit for Shell.”
“The Gasnor acquisition provides Shell with invaluable customer and market insight built up over a number of years.”
Subject to Norwegian regulatory approvals, the transaction is expected to close in the third quarter of 2012. Norway was one of the first European countries to focus on LNG as a viable fuel.