Shell to buy Repsol's liquefied natural gas assets for $4.4 bn – GAIL loses out
27 February 2013
Royal Dutch Shell, Europe's largest energy company, today acquired Repsol SA's liquefied natural gas (LNG) assets for $4.4 billion in cash, outbidding other global oil giants, including a GAIL-led consortium.
The deal will expand the Anglo-Dutch oil giant's dominant position in LNG, while allowing the Spanish oil giant to reduce its debt by more than half to €2.2 billion.
Shell will also assume $2.3 billion in financial leases and debt as part of the deal, which would exclude Canaport - a Canadian LNG import terminal that Repsol had originally also put up for sale.
Repsol has put its LNG assets in Trinidad and Tobago, Peru and Spain up for sale after Argentina seized its YPF unit and refused to pay $10.5 billion for its 51-per cent stake in YPF.
The Madrid-based company has also earmarked other assets worth around $6 billion to divest in order to cut debt and avoid a debt-rating downgrade to junk status.
Last year, credit rating agency Standard & Poor's cut Repsol's credit rating to BBB- and said it may lower the company's debt one more step to junk unless borrowings were lowered.