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Shell Agrees to Buy Norway’s Gasnor

July 11, 2012 in HHP, LNG, Marine by Rich Piellisch  |  No Comments

$74 Million Deal Thrusts Shell into Downstream LNG Leadership Role

Shell disclosed a share purchase agreement for the remainder of Norway’s Gasnor, supplier of liquefied natural gas to the world-leading LNG marine sector there. The deal, expected to close in the third quarter subject to Norwegian regulatory approvals, will bring Shell three small scale production plants and distribution assets including two tanker ships, a fleet of trucks and a network of terminals.

Shell has taken center stage at Gasnor.

Shell already holds a 4.1% stake in Gasnor, which it says operates “an end to end supply chain.” Shell also pointed out that it “already has an upstream and downstream presence in Norway and this LNG acquisition is part of Norske Shell’s growth ambitions.”

“The acquisition of Gasnor is an important step for Shell towards creating an LNG sales business,” Shell said, terming LNG “a reliable new addition to Shell’s commercial customers’ fuel mix.”

“The benefits of natural gas in meeting our future energy needs are well-documented,” Shell downstream LNG VP Colin Abraham said in a release.

LNG as transportation fuel, he said, “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. This will help us to quickly develop and meet customer requirements for LNG as a transport fuel,” Abraham said.

Shell says it will capitalize on Gasnor’s experience in LNG sales and marketing, “combining it with its own customer reach to target European marine customers,”  ahead of impending environmental regulations.

“Shell’s customer reach and Gasnor’s LNG sales and marketing experience is a winning combination,” Gasnor CEO Eilef Stange said in the Shell announcement.  “There is real growth potential for small scale LNG in Europe, particularly in the marine sector, and Gasnor with Shell is well placed to capitalize on this.”

Shell Is a World Upstream LNG Leader

Shell says it’s a participant in nine LNG projects seven countries with three new ones under construction. It was a partner in the first-ever purpose built LNG carrier “and has been delivering LNG safely for nearly half a century.

“Today Shell is the world’s largest LNG shipping operator, with interests in around a quarter of the LNG vessels in operation,” the firm says.

Shell notes in the Gasnor announcement that its is working on LNG fuel for trucks in both the U.S. and Canada.

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Source: Shell and Gasnor announcements and Fleets & Fuels research

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