Shell Sells ‘BG Group’ Assets to ‘KUFPEC Thailand Holdings’

The deal of Bangkot and UK North Sea fields would help in raising capital and continued LNG operation in Thailand.

Thailand: Shell has agreed to sell its subsidiaries, Thai Energy and Shell Integrated Gas Thailand, which were acquired during BG Group acquisition to KUFPEC Thailand Holdings, a subsidiary of Kuwait Foreign Petroleum Exploration Company. The two subsidiaries comprise of 22.22% equity stake in the Bangkot field. The company sold its assets at USD900 million, which was a part of the divestment program of raising USD30 billion to minimize the debt that reached around USD80 billion in previous year. Shell has also decided to sell its assets in UK North Sea to Chrysaor for an amount of USD3.8 billion.

TechSci Research depicts that this deal will drive the production and consumption of LNG in the country more rapidly, thereby boosting the demand for LNG market in Thailand. Moreover, the growing demand for electricity, declining domestic production of natural gas coupled with rising utilization of natural gas as feedstocks for petrochemical plants, is boosting demand for LNG in Thailand. Expansion of existing LNG terminals, installation of FSRU (Floating Storage Regasification Unit) and growing demand for natural gas as an alternate fuel are major factors anticipated to positively influence the LNG market in Thailand over next ten years.

According to recently published report of TechSci Research, “Thailand LNG Market, By Region, By Application, By LNG Terminal, Competition Forecast and Opportunities, 2011-2025”, LNG market in Thailand is projected to exhibit a CAGR of 7.2% during 2016 - 2025. The country mainly imports LNG from Qatar, Australia and Indonesia. Bangkok dominated Thailand LNG market over the past few years, on account of high population density, rising number of industrial units and presence of gas based power plants in this region. Moreover, power sector accounted for highest market share in Thailand LNG market over the past few years, owing to decline in production of natural gas and rising dependence on LNG for power generation.