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Sawan was asked during Shell’s third-quarter earnings call on Thursday if he could share his views on the 2025 outlook for the European gas market and Shell’s global LNG earnings.
“I don’t have a crystal ball. I mean what we do see is continued uncertainty and volatility in the gas markets,” he said.
“It’s fair to say that the prompt markets are looking tighter than maybe some envisaged in particular because of the slippage of some of the major LNG developments that were due to come up in the US,” Sawan said.
He said that “we’ve seen some good buying this year at different points in the cycle”, particularly in China and India.
“Europe, particularly industrial demand continues to be soft, but we are also seeing new buyers of LNG in Brazil. For example, demand has grown because of challenges with the hydro capacity there. Egypt is also importing,” he said.
“Pre-2022 price normalized space”
“So 2025 is difficult to call in particular given the volatility and the geopolitical context, but I think it’s fair to say that the market at least for now continues to show balance at least through the next year on a physical basis,” he said.
He said that the “nature of the seasonality that we had been used to in the past – we don’t see as much going forward.”
“It’s also fair to say that the volatility that we have seen since 2022 isn’t there,” he said.
“We’re more in sort of the pre-2022 price normalized space, and so it’s a different context. And we need to be able to adapt to back to pre-2022 realities as a company,” Sawan said.
Shell’s integrated gas segment reported adjusted earnings of about $2.87 billion in the third quarter.
This compares to $2.53 billion in the same period a year ago and $2.67 billion in the prior quarter.
The company sold 17.04 million tonnes of LNG in July-September, a rise from 16.01 million tonnes in the same period last year.
LNG sales rose 4 percent compared to 16.41 million tonnes in the prior quarter.
Shell sold 50.32 million tonnes of LNG from January to September, a 3 percent increase from 49.01 million tonnes in 2023.