By CHOU HUI HONG
SINGAPORE (Bloomberg) -- Pavilion Energy,
the liquefied natural gas unit of Singapores state-owned
investment company, will pay $1.3 billion for a 20 % stake in
three gas blocks off the shore of Tanzania in east Africa.
Pavilion Energy, owned by Temasek Holdings Pte, entered an
agreement with Ophir Energy, which owns 40 % of the estimated
15 Tcf of gas in Tanzania Blocks 1, 3 and 4, the company said
in a statement. The transaction is scheduled to be completed in
the Q1 of 2014.
The investment helps Pavilion Energy diversify its supply of
LNG to meet Asian demand as Singapore vies to become a
gas-trading hub. The first deliveries from Tanzania are
scheduled to start in 2020.
The natural gas developments in Tanzania hold
tremendous potential, not just for Pavilion Energy but for
Singapore and Asia, Chairman Tan Sri Mohd Hassan Marican
said in a statement.
Temasek set up Pavilion in April to supply LNG in Asia, the
company said at the time. Pavilion Gas, the unit that manages
operations and LNG distribution, started trading and plans to
complete its first delivery to Asia by February, Chief
Executive Seah Moon Ming said in a speech last month.
Pavilion signed its first long-term deal in October with a
European supplier for 500,000 mtpy
of LNG for 10 years starting in 2018. The contract is with
a major European oil and gas
multinational for delivery to Singapore and the region,
said Seah, declining to identify the firm.
Singapore, Asias oil-trading center, also wants
to be a hub for LNG, supercooled gas shipped by tankers rather
than pipelines. It opened its first LNG terminal in May with an
initial annual capacity of 3.5 MMt, which is scheduled to rise
to 6 MMt by the end of the year. Gas supplied 84 % of
Singapores electricity in 2012, according to the Energy
Market Authority, the nations energy regulator.
A fourth tank is planned to raise capacity to 9 million tons
by 2016. That would allow Singapore to offer last-minute
deliveries, or spot cargoes, to buyers in Asia seeking an
alternative to long-term contracts.
Temaseks total holdings jumped to a record $173
billion in the year ended March 31 as surging global stock
markets bolstered assets. Energy and resources companies
make up 6 % of the investments, according to its annual report
released in July.
The state-owned investor said in July that new investment
opportunities include industries such as energy, resources,
life sciences, consumer and technology.