Annual LNG sales dropped to 64.20MT from 71.90MT in 2020 and quarterly sales fell
LNG News Editor:
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.
Shell said the net income included non-cash gains of $3.2Bln due to the fair value accounting of commodity derivatives and net gains on the sale of assets of another $3Bln, partly offset by post-tax impairment charges of $800 million.
$20Bln zone
Shell’s annual net income came to $20.1Bln compared with a $21.7Bln loss in 2020. Adjusted earnings for the fourth quarter to the end of December 2021 came to $6.4Bln compared with $393 million in the prior-year period.
Annual LNG sales dropped to 64.20 million tonnes from 71.90MT in 2020.
Fourth-quarter LNG sales declined to 16.72MT from 17.17MT in the same three months of 2020.
Cash flow from operating activities for the fourth quarter was $8.2BBln versus $6.2Bln in the prior-year period.
“Cash flow from investing activities for the quarter was an inflow of $2.6Bln, driven by proceeds from sale of property, plant and equipment and businesses of $8.8Bln, mostly due to the Permian sale in the USA, partly offset by capital expenditure of $6.2Bln,” explained Shell.
“Compared with the third quarter 2021, adjusted earnings reflected higher contributions from LNG trading and optimisation and higher realised oil, gas and LNG prices,” said Shell.
Shell, which has now formally moved its management operations to London in a corporate overhaul, has four divisions, Integrated Gas, which includes LNG, and separate Upstream, Oil Products and Chemicals units.
Shell Chief Executive Ben van Beurden said 2021 had been a “a momentous year” for Shell.
“We launched our ‘Powering Progress’ strategy and simplified our share structure and organisation. Progress made in 2021 will enable us to be bolder and move faster,” stated the CEO.
For the various divisions, Integrated Gas posted adjusted earnings of $4.05Bln, Upstream reported $2.83Bln of earnings, the Oil Products division $555 million and Chemicals reported a loss of $42M.
In Integrated Gas operations, Shell said that compared with the third quarter of 2021, adjusted earnings primarily reflected significantly higher contributions from LNG trading and optimisation, leveraging the scale and global reach of the Shell LNG portfolio.
The company said total oil and gas production in the fourth quarter remained at a similar level to the previous quarter due to higher maintenance activities, partly offset by field ramp-ups.
LNG liquefaction volumes increased by 7 percent due to higher feed-gas supply and overall lower maintenance activities.
Prelude shutdown
“Compared with the full year 2020, total oil and gas production increased by 3 percent, mainly due to the restart of production at the Prelude floating LNG operations in Australia,” said Shell.
However, Prelude later stopped production as safety regulators investigated fire risk procedures on the FLNG hull.
Van Beurden suggested at a post-earnings conference call that the “Prelude” could be shut until the June quarter.
The CEO said issues caused by the Covid-19 pandemic, including Western Australia’s quarantine requirements, were making it more difficult to repair the electrical fault that caused the shutdown of the vessel in December 2021.
“It’s not been made easy because of the pandemic. It’s a remote facility, it is difficult to get people in,” he stated.
