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Temasek’s Pavilion buys stake in Tanzania gas to diversify Asia LNG supply

11.14.2013  | 

Pavilion Energy, the liquefied natural gas unit of Singapore’s 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.

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By CHOU HUI HONG

SINGAPORE (Bloomberg) -- Pavilion Energy, the liquefied natural gas unit of Singapore’s 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, Asia’s 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 Singapore’s electricity in 2012, according to the Energy Market Authority, the nation’s 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.

Temasek’s 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.



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