KUCHING: Shell’s Bintulu gas-to-liquids venture could see a US$1 billion ownership change under a reported majority-stake sale.
DealStreetAsia, citing unidentified industry sources, reported that Shell plc is considering the sale of a majority stake in Shell MDS (Malaysia) Sdn Bhd, which operates the gas-to-liquids facility in Bintulu, Sarawak.
The potential transaction could be valued at around USD1 billion (RM4.05 billion), with Barclays reportedly acting as financial adviser as Shell evaluates strategic options for the business.
A Shell spokesperson confirmed to DealStreetAsia that the group was undertaking a potential strategic review of its equity interest in Shell MDS.
The spokesperson said no decision had been made and the business continued to focus on safe and reliable operations.
Shell currently owns 72 per cent of Shell MDS through Shell Gas BV, according to the group’s official website.
The remaining shareholding is held by Diamond Gas Holding Sdn Bhd at 14 per cent, PETRONAS at 7 per cent and the Sarawak government at 7 per cent. Diamond Gas Holding is a wholly owned subsidiary of Mitsubishi Corp.
DealStreetAsia did not disclose how much of Shell’s 72 per cent interest could ultimately be sold. It said discussions remained at an early stage and the terms could still change.
According to the report, the business is estimated to generate annual earnings before interest, taxes, depreciation and amortisation (Ebitda) of about USD120 million to USD130 million.
Commissioned in 1993, the Bintulu facility became the world’s first commercial-scale plant to convert natural gas into liquid hydrocarbons using Shell’s proprietary MDS technology.
According to Shell’s website, the process first converts natural gas into synthesis gas before converting it into hydrocarbon molecules that can subsequently be refined into different products.
The facility produces synthetic waxes, drilling fluids, chemicals, specialty fluids and middle distillates, with its products used across more than 40 applications including food packaging, coatings, road construction, cosmetics, metalworking and drilling base fluids.
