Shell offloads 15% stake in Malaysia LNG Tiga for $750m

Royal Dutch Shell (Shell) has closed the $750m sale of its 15% stake in Malaysia LNG Tiga (MLNG Tiga) to the Sarawak State Financial Secretary (SFS).

Incorporated in 1995, MLNG Tiga produces and processes natural gas.

Prior to the sale, the company was owned by Petronas (60%), Shell Gas (15%), Sarawak government (10%), Nippon Oil Finance (Netherlands) (10%), and Mitsubishi subsidiary Diamond Gas (Netherlands) (5%).

After adjustments, Shell received net final consideration of $640m.

The acquisition of the 15% interest will increase the shareholding of SFS in MLNG Tiga to 25%.

MLNG Tiga is operated by Petronas subsidiary Malaysia LNG as part of the larger PETRONAS LNG Complex in Bintulu.

The sale represents Shell’s exit from the complex.

The company previously held interests in the LNG complex through joint venture (JV) agreements related to MLNG Satu and Dua, which later expired.

Shell Gas entered a JV with Petronas and Mitsubishi to develop the LNG project in Bintulu, which lead to the incorporation of Malaysia LNG.

The JV agreement expired in 2003 and then Petronas increased its stake in Malaysia LNG to 90%.

Even after the sale, Shell will continue to operate in Malaysia.

Shell is focused on simplifying its portfolio and emerging as a simpler and more resilient company.

The transaction is consistent with Shell’s divestment programme, through which it aims to achieve $30bn worth of dispositions by year-end.

According to Reuters, the total assets Shell has sold or agreed to sell since 2015 now stands at around $27bn.