UPDATE 2-LNG deal eases Repsol debt, boosts Shell position

Tue Feb 26, 2013 3:34pm EST
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* Shell to pay $4.4 billion in cash, assume $2.3 bln in leases and debt

* Repsol to cut debt by more than half to 2.2 billion euros

* Extends Shell's leading LNG position among oil majors

* Deal excludes Canadian terminal Canaport

By Tracy Rucinski and Andrew Callus

MADRID/LONDON, Feb 26 (Reuters) - Repsol has sold a set of liquefied natural gas (LNG) assets to Royal Dutch/Shell for $4.4 billion cash, more than halving the Spanish oil company's heavy debt and extending the Anglo-Dutch group's dominant position in LNG.

The sale, announced by the two companies on Tuesday, includes LNG assets in Trinidad and Tobago, Peru and the Bay of Biscay but not Canadian import terminal Canaport, which failed to attract interest because booming North American gas production has eroded its value.

Shell will also take on $2.3 billion of financial leases and debt as part of the deal Which they expect to complete before the end of the year.

Repsol said it would book a capital gain of $2.7 billion from the deal and make a $1.3 billion provision against the value of Canaport, leaving a net gain of $1.4 billion and easing its financial situation.   Continued...