Pavilion Energy


Pavilion Energy in $1.6b Tanzania Gas Deal

15 November 2013

Singapore (The Straits Times)

Temasek Holdings' newly established liquefied natural gas (LNG) company, Pavilion Energy, has splashed out big cash to secure supplies from Tanzania.

It said in a statement yesterday that it is paying US$1.29 billion (S$1.6 billion) to buy a 20 per cent interest in three Tanzania gas blocks from Ophir Energy, an oil and gas exploration firm.

Listed and based in London, Ophir's operations are focused in Africa. It owns 40 per cent of the Tanzania gas blocks.

The other 60 per cent is held by another British oil and gas firm, BG Group.

The Tanzanian fields are estimated to hold some 15 trillion cubic feet of gas, with the first delivery expected to start in 2020.

Pavilion said this is its first major LNG supply investment, adding that the purchase will help to build up its LNG portfolio.

Tanzania, with major gas discoveries found off the shores of the country recently, holds promise for the company.

Pavilion said the discoveries are set to position the country as a key LNG exporter.

The investment will also boost Pavilion's supply of LNG available for trading as it strives to meet growing demand in the region.

"It supports our plan to secure long-term energy supply at competitive prices to meet the need for clean energy in Asia," said Pavilion chief executive Seah Moon Ming.

The company's war chest is also expanding. It now has a committed capital of US$6.9 billion compared with the start-up capital of US$1 billion.

In September, Mr Seah said at an industry gathering that the amount will grow and "more capital will be injected as our investment plans unfold". He also said then that Pavilion already has stakes in United States gas producer Chesapeake Energy and in Kunlun Energy, a China exploration and production company.

It also wants to form trading partnerships with LNG companies from South Korea, Japan, China and Taiwan.

Set up in April by Temasek to manage gas operations in Singapore, Pavilion is also investing in the distribution and trading of LNG in the region.

The transaction, which is subject to regulatory and shareholder approvals, is slated to be completed in the first quarter of next year.

-- By Mok Fei Fei

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