LNG

UK-based major Shell reported better-than-expected earnings to start 2024 despite lower prices and a decline in LNG sales as the natural gas, oil and chemicals trading units all  performed well.

July 7 (LNGJ) - Shell Plc, Europe’s largest energy company, has issued a second-quarter 2023 earnings forecast update. The Integrated Gas unit, one of six Shell divisions and including LNG, is set to maintain steady production levels. However, trading and optimisation is expected to be significantly lower compared with a strong first quarter of 2023 “due to seasonality” and fewer optimisation opportunities.

   Shell added that overall Upstream oil and gas output is expected to fall to between 1.650 million barrels of oil equivalent per day and 1.750M boe per day, down from 1.877M boe per day in the first quarter because of “scheduled maintenance, including assets in the Gulf of Mexico, Norway, Malaysia and Brazil”. The company’s refinery utilisation has declined in the second quarter from 91 percent to between 85 percent and 89 percent. Shell publishes its next earnings on July 27.

Shell plc, the largest oil and gas company in Europe, posted adjusted third-quarter earnings of $9.45Bln, more than double the $4.13Bln income from the same quarter of 2021, though 18 percent down on the previous quarter, reflecting lower LNG trading and optimisation results as well as lower chemical and refining margins.

Oct 6 (LNGJ) - UK major Shell issued a third-quarter earnings forecast update saying cash flow from operations was impacted at the end of August 2022 by working capital outflows of around $2.5 billion. “Prevailing volatility could lead to additional outflows in CFFO in September from the combined effect of price, changes in inventory volumes (including gas storage), margining effects on derivatives and movements in accounts payable and receivables balances,” said the company.

   In Integrated Gas, one of four Shell divisions and including LNG, production was expected to be between 890,000 and 940,000 barrels of oil equivalent per day. In adjusted gas earnings, pre-tax depreciation is expected to be between $1.3Bln and $1.7Bln and taxation to be between $1.3Bln and $1.6Bln. “Trading and optimisation results for Integrated Gas are expected to be significantly lower compared to the second quarter 2022 as a result of seasonality and substantial differences between paper and physical realisation in a volatile and dislocated market,” said Shell.

Shell’s earnings skyrocketed in the second quarter as more projects in Qatar, Australia and UK are set to boost liquefied natural gas and pipeline gas volumes while the company sold more than 15 million tonnes of LNG during the quarter at high prices.

Shell plc, the now UK-based oil and gas major and leading liquefied natural supplier, reported fourth-quarter income of $11.5 billion compared with $4Bln of losses a year ago, while annual LNG sales dropped by 11 percent.

Royal Dutch Shell, one of the world’s leading liquefied natural gas providers, said in a third-quarter earnings outlook that its Integrated Gas division would be impacted by the effects of the oil price slump on long-term LNG contracts.

Royal Dutch Shell reported a small decline in liquefied natural gas sales volumes to 35.4 million tonnes for the first half while earnings from the natural gas division dropped 25 percent on lower pricing amid the start-up of the Prelude FLNG facility offshore northwest Australia.