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    Shell sees integrated gas gains in Q4

Summary

Higher LNG spot prices expected to blunt impact of supply disruptions.

by: Dale Lunan

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Shell sees integrated gas gains in Q4

Global major Shell said January 7 surging international gas prices will boost earnings from its integrated gas operations in Q4 2021, as it overcomes operational issues which reduced LNG production, mainly at its Prelude floating LNG facility and at Gorgon LNG, where it holds a 25% interest.

“Trading and optimisation results in integrated gas are expected to be significantly higher compared to the third quarter 2021, overcoming ongoing supply issues and capturing unique optimisation opportunities generated through the large scale and scope of our LNG trading portfolio in the prevailing high LNG spot price environment,” it said in a regulatory filing.

Integrated gas posted adjusted earnings of $1.68bn in the third quarter and adjusted EBITDA of $3.77bn as production held steady at about 938,000 barrels of oil equivalent (boe)/day and gas liquefaction volumes slipped to 7.39mn mt from 7.49mn mt in Q2 2021.

Fourth quarter production is expected to fall in the 910,000-950,000 boe/day range, while liquefaction volumes are forecast at between 7.7mn mt and 8.3mn mt, at the lower end of guidance presented in its Q3 results.

Shell also confirmed that the remaining $5.5bn in proceeds from the sale last year of its Permian shale oil assets will be distributed to shareholders in the form of share buybacks “at pace.” It gave no timeline for the repurchases, but said more details would be released along with its Q4 2021 earnings report on February 3.