By Sarah Kent
LONDON--Royal Dutch Shell PLC (RDSB.LN) said Wednesday it has agreed to acquire Norwegian liquefied natural gas producer and distributor, Gasnor, for $74 million.
Shell said the acquisition will help establish a sales and marketing arm for transport fuel made from LNG, ahead of new environmental regulations due to come into force in 2015 that will require lower levels of emissions of pollutants from shipping traffic in the Baltic Sea, English Channel and North Sea.
The move follows other initiatives from Shell to expand the use of natural gas, which has undergone a boom in production in North America, as a transport fuel in direct competition with oil.
"Shell believes liquefied natural gas in the transport sector will develop into a sizeable market and, given its industry-leading expertise across the LNG value chain, the extension into this market is a good fit for Shell," said Colin Abraham, Shell's Vice President for downstream LNG in a statement. "This will help us to quickly develop and meet customer requirements for LNG as a transport fuel," he added.
This acquisition follows a string of investments in the LNG fuel sector over the last year.
In September 2011, Shell invested in a project to supply LNG to Shell Flying J truck stops in Canada, while last month the Anglo-Dutch oil major signed a memorandum of understanding to supply LNG for trucks at 100 fueling stations across the U.S. starting in 2013.
Shell already owns 4.1% of Gasnor shares. Its acquisition of the remainder of the company is expected to close in the third quarter, subject to regulatory approvals.
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(END) Dow Jones Newswires
July 11, 2012 03:06 ET (07:06 GMT)
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