February 26, 2013 / 2:01 PM / 4 years ago

Repsol set to sell LNG assets to Shell - sources

MADRID, Feb 26 (Reuters) - Spanish oil major Repsol will announce the sale of liquefied natural gas assets to Royal Dutch Shell later on Tuesday, sources with knowledge of the deal said.

Repsol put a block of LNG assets based in Canada, Trinidad and Tobago and Peru up for sale last summer to cut debt.

The sale to Shell does not include the Canadian plant Canaport, one of the sources said, which some bidders had given a negative valuation because of a glut in North American gas supply.

Repsol, which owns 75 percent of Canaport, is likely to write down the value of the asset, the source said.

Repsol and Shell declined to comment.

The Spanish company has been under pressure to reduce its debt and hold onto an investment grade credit rating ever since Argentina seized control of its majority stake in energy company YPF last April.

It had net debt of 5 billion euros ($6.61 billion)at the end of September, which will be significantly reduced after the sale of the LNG assets. Repsol has said the assets have an off-balance sheet debt of 3.6 billion euros and gross debt of 1 billion euros.

The LNG sale had drawn interest from a range of bidders including China's Sinopec, Russia's Gazprom, GAIL Ltd of India and GDF Suez of France.

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