KUALA LUMPUR: Royal Dutch Shell Plc is considering a sale of its stake in a Malaysian liquefied natural gas export plant, which could fetch more than $1 billion, people familiar with the matter said.
Shell is gauging interest in its 15 percent stake in MLNG Tiga Sdn., which owns an LNG terminal in Sarawak on the island of Borneo, according to the people. The sale may draw interest from private-equity firms, the people said, asking not to be identified as the process is private. Malaysia’s state-owned Petroliam Nasional Bhd., which holds 60 percent of MLNG Tiga, has pre-emptive rights on the stake, one of the people said.
The disposal is part of the Anglo-Dutch energy giant’s plan to raise $30 billion from asset sales in the three years through 2018 to help cut borrowings after its acquisition of BG Group Plc prompted Fitch Ratings Ltd. to lower its credit rating. The company’s total debt ballooned to $90.3 billion at the end of June, from $52.9 billion a year earlier, data compiled by Bloomberg show.
“The pressure is on Shell to slim down its global footprint following the BG acquisition,” Saul Kavonic, a Perth-based analyst at energy consultancy Wood Mackenzie Ltd., said in an e-mailed response to questions. “Majors are also looking to remove mature, high ongoing-cost assets and rebalance towards growth and long-life ‘cash cow’ assets.”
