Released January 09, 2025 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--After posting hefty losses during the third quarter, Shell plc (NYSE:SHEL) (London, England) warned that its results could be even worse for the fourth quarter amid a weaker outlook for liquefied natural gas (LNG).
Shell on Wednesday offered a preliminary look at results for the fourth quarter. Final results are due January 30.
For its integrated gas business, the company lowered its upstream production guidance from about 1.8 million barrels of oil equivalent per day (Boe/d) to 1.79 million Boe/d on the low end. Guidance on liquefaction volumes for its LNG operations was lowered from a range of 6.9 million to 7.5 million metric tons to between 6.8 million and 7.2 million metric tons.
During the third quarter, the company produced 7.5 million metric tons of LNG. In its guidance statement on the fourth quarter, the company blamed the expected downturn on fewer cargo deliveries and lower volumes of feedgas.
An outlook report published by Shell in early 2024 showed an expected 50% increase by 2040 in global demand for LNG, driven largely by the energy-hungry economies of Asia switching from coal to natural gas.
China, the second-largest economy in the world behind the United States, has nevertheless continued to show growth below what was expected in the years that followed the end of the COVID-19 pandemic. The United States, meanwhile, may be taking some of the market share in LNG away from its European peers given the steady gains in export volumes.
Elsewhere, Shell said it expects the results from its oil and gas trading business to be significantly lower than during the third quarter.
A lower-for-longer market for commodity prices last year left welts on many of the largest energy companies in the world. Crude oil prices were essentially range-bound for much of 2024, leaving refinery margins at historic lows.
Natural gas prices too were suppressed. In the United States, the world's largest economy, the benchmark Henry Hub natural gas price averaged $2.21 per million British thermal units last year, the lowest average price when adjusted for inflation ever recorded by the U.S. Department of Energy.
Shell in the third quarter reported net earnings of $4.3 billion, compared with $7 billion during the same period in 2023.
In December, meanwhile, Shell and Norwegian energy major Equinor (NYSE:EQNR) (Stavanger, Norway) agreed to form a 50:50 joint venture to tackle an uncertain future in the United Kingdom's territorial waters in the North Sea. It's expected to help the companies cope with a production region that is in decline, higher windfall taxes and a new U.K. government that has yet to get behind the diminishing oil and gas sector.
"With the once prolific basin now maturing and production naturally declining, the combination of portfolios and expertise will allow continued economic recovery of this vital U.K. resource," the companies said in a joint statement.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Shell on Wednesday offered a preliminary look at results for the fourth quarter. Final results are due January 30.
For its integrated gas business, the company lowered its upstream production guidance from about 1.8 million barrels of oil equivalent per day (Boe/d) to 1.79 million Boe/d on the low end. Guidance on liquefaction volumes for its LNG operations was lowered from a range of 6.9 million to 7.5 million metric tons to between 6.8 million and 7.2 million metric tons.
During the third quarter, the company produced 7.5 million metric tons of LNG. In its guidance statement on the fourth quarter, the company blamed the expected downturn on fewer cargo deliveries and lower volumes of feedgas.
An outlook report published by Shell in early 2024 showed an expected 50% increase by 2040 in global demand for LNG, driven largely by the energy-hungry economies of Asia switching from coal to natural gas.
China, the second-largest economy in the world behind the United States, has nevertheless continued to show growth below what was expected in the years that followed the end of the COVID-19 pandemic. The United States, meanwhile, may be taking some of the market share in LNG away from its European peers given the steady gains in export volumes.
Elsewhere, Shell said it expects the results from its oil and gas trading business to be significantly lower than during the third quarter.
A lower-for-longer market for commodity prices last year left welts on many of the largest energy companies in the world. Crude oil prices were essentially range-bound for much of 2024, leaving refinery margins at historic lows.
Natural gas prices too were suppressed. In the United States, the world's largest economy, the benchmark Henry Hub natural gas price averaged $2.21 per million British thermal units last year, the lowest average price when adjusted for inflation ever recorded by the U.S. Department of Energy.
Shell in the third quarter reported net earnings of $4.3 billion, compared with $7 billion during the same period in 2023.
In December, meanwhile, Shell and Norwegian energy major Equinor (NYSE:EQNR) (Stavanger, Norway) agreed to form a 50:50 joint venture to tackle an uncertain future in the United Kingdom's territorial waters in the North Sea. It's expected to help the companies cope with a production region that is in decline, higher windfall taxes and a new U.K. government that has yet to get behind the diminishing oil and gas sector.
"With the once prolific basin now maturing and production naturally declining, the combination of portfolios and expertise will allow continued economic recovery of this vital U.K. resource," the companies said in a joint statement.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
