Repsol, Shell Reach LNG Deal
Repsol SA plans to sell some of its liquefied-natural-gas assets to Royal Dutch Shell PLC for $4.4 billion in cash, increasing Shell’s LNG exposure and helping Repsol cut a heavy debt load, the companies said Tuesday.
Shell also intends to assume $2.3 billion in financial leases and debt as part of the deal, which would exclude a Canadian LNG import terminal that Madrid-based Repsol had originally also put up for sale. The Spanish company’s liquefaction facilities in Peru and Trinidad and Tobago along with an LNG import terminal in Spain remain part of the transaction, which is expected to close by the end of the year or in early 2014.
The deal would go a long way toward helping Repsol protect its investment-grade credit rating, which came under threat last year after its Argentine unit was nationalized. The transaction also underscores the changing dynamics in the global natural-gas trade as the U.S., which is experiencing a production boom, opens the prospect of becoming an exporter of the fuel.
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