Shell expects Q2 LNG trading results to be in line compared to last year

LNG giant Shell expects trading and optimization results for its integrated gas business in the second quarter of this year to be in line compared to the same quarter last year.

However, the results will be lower compared to the first quarter of this year “due to seasonality”, Shell said in its second-quarter update note on Friday.

Shell’s adjusted earnings reached $7.73 billion in the first quarter, down 19.8 percent compared to $9.64 billion in the year before, while the company’s integrated gas segment reported adjusted earnings of about $3.68 billion in the first quarter, down from $4.91 billion in the same period a year ago and $3.97 billion in the prior quarter.

In the second quarter last year, Shell reported adjusted earnings of $5.07 billion and the gas segment earned about $2.5 billion.

Liquefaction volumes

Shell said in the quarterly update that it expects liquefaction volumes to reach about 6.8 – 7.2 million tonnes in the second quarter.

The company previously expected liquefaction volumes to reach about 6.8 – 7.4 million tonnes in the second quarter and the outlook reflected seasonality (higher maintenance).

Shell’s liquefaction volumes reached 7.17 million tonnes in the second quarter last year and 7.58 million tonnes in the first quarter this year.

The company sold 16.87 million tonnes of LNG in the January-March period and 16.03 million tonnes of LNG in the second quarter last year.

Shell expects integrated gas production to reach 940–980 kboe/d in the second quarter, compared to 920 – 980 kboe/d in the previous estimate, while upstream production is expected to be at 1,720-1,820 kboe/d, compared to 1,630-1,830 kboe/d previously.

Impairment of up to $2 billion

Shell also said it expects to record non-cash post tax impairments of $1.5 – $2 billion.

The impairments mainly include the Singapore chemicals and products assets ($0.6 – $0.8 billion) as well as Rotterdam HEFA ($0.6 – $1 billion), which is reported in the marketing segment, it said.

Shell recently said it will temporarily pause on-site construction work at its 820,000 tonnes a year biofuels facility in Rotterdam to “assess the most commercial way forward for the project”.

The company plans to publish its second-quarter results on August 1.

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