Shell could get its hands on Repsol's LNG assets

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LONDON (ShareCast) - Anglo-Dutch oil mammoth Shell (LSE: RDSB.L - news) could be close to buying the liquefied natural gas (LNG) business of Spanish company Repsol.

According to Spanish daily Cinco Dias, Respol is studying the possible sale of its LNG assets in Peru, Trinidad and Tobago, Canada and Spain for around €2.0bn, less than an initial estimate of €3.0bn.

The paper's internet edition reported that Repsol's board will "probably approve" the divestment at its meeting scheduled for Wednesday January 30th.

French company GDF Suez and Russian companies Gazprom and Novatek have also been named as parties interested in the assets.

The sale would be part of Repsol's attempt to divest €4.5bn worth of assets before 2016 in an attempt to reduce its debt and keep its investment grade rating.

However, analysts have expressed some doubts behind Shell's rationale for the deal. Peter Hutton of RBC Capital Markets was cited as saying by Reuters: "We find the logic of such a deal difficult from Shell's perspective. We would not expect it to show much interest in Repsol's stakes in either Atlantic LNG or Canaport, but there may be some synergy on Peru LNG."

BC