Royal Dutch Shell today announced the successful completion
of the acquisition of Repsol SA's liquefied natural gas
outside North America for a headline cash consideration of
$4.1 billion (B).
As part of the transaction, Shell will assume $1.6 B of
balance sheet liabilities relating to existing leases for LNG
ship charters, substantially
increasing the shipping capacity available to Shell's LNG
The deal gives Shell an additional 7.2 million metric tons
per year (metric MMtpy) of directly managed LNG volumes. The
company's portfolio will be boosted with LNG
supply in the Atlantic from
Trinidad and Tobago, and in the Pacific from Peru.
Since the announcement of the transaction in February 2013,
value adjustments have been made in accordance with the terms
of the sales and purchase agreement. These adjustments are
expected to lead to a net cash purchase price of $3.8 B,
compared to purchase price of $4.4 B announced in February
2013, and balance sheet liabilities of $1.6 B, compared to
$1.8 B at the initial announcement.
This includes the exercise of pre-emption rights of the BBE
power plant in Spain by an existing partner, as well as other
adjustments, such as the financial performance of the
portfolio and working capital movements since the effective
date of October 1, 2012.
The deal closed in 2014. Shell's capital investment in the
fourth quarter of 2013 will reflect $3.4 B for this
transaction, with the remainder of $2 B booked in 2014, of
which $1.6 B is a non-cash item relating to finance ship