UPDATE 1-Repsol sells LNG assets to Shell, eases debt concerns

* Shell to pay $4.4 billion in cash

* Also assumes $2.3 billion in financial leases and debt

* Repsol to cut debt by more than half to 2.2 billion euros

* Deal excludes Canadian terminal Canaport

MADRID, Feb 26 (Reuters) - Repsol has sold liquefied natural gas assets to Royal Dutch Shell for $4.4 billion in cash in a deal that will cut the Spanish oil major's net debt by more than half and ease concerns over its credit ratings.

The sale includes LNG assets based in Trinidad and Tobago, Peru and the Bay of Biscay but not Canadian plant Canaport, which was originally put on the block but failed to draw interest from bidders.

Shell will also take on $2.3 billion of financial leases and debt as part of the deal, expected to be completed before the end of the year, the two companies said on Tuesday.

Repsol said it would book a capital gain of $2.7 billion from the deal and make a $1.3 billion provision against the value of Canaport, leaving a net gain of $1.4 billion and thus easing its financial situation.

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

It put the LNG assets up for sale last summer as part of a wider divestment programme aimed at cutting debt, which stood at 5 billion euros ($6.5 billion) at the end of September, excluding debt related to its 30 percent stake in Gas Natural Fenosa.

Following the sale, net debt will fall to 2.2 billion euros, Repsol said.

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.

Repsol, which is due to report 2012 results on Feb. 28, said it had sold assets for more than 5 billion euros in the past year, surpassing the target outlined in its strategic plan.