Shell expects “significantly lower” LNG trading results in second quarter

LNG giant Shell is expecting “significantly lower” trading and optimization results for its integrated gas business in the second quarter of this year compared to the previous quarter.

The UK-based firm said in its second-quarter update note on Friday this is due to “seasonality and fewer optimization opportunities”.

“The Q2’23 contribution is expected to be in line with the average contribution of Q2 in 2021 and 2022,” it said.

Shell’s adjusted earnings reached $9.64 billion in the first quarter, while the company’s integrated gas segment reported adjusted earnings of $4.91 billion.

Shell sold 16.97 million tonnes of LNG in the January-March period, while its liquefaction volumes dropped by 10.1 percent year-on-year to 7.19 million tonnes in the first quarter.

The firm said in the update it expects liquefactions volumes to reach about 6.9 – 7.3 million tonnes in the second quarter.

It expects integrated gas production to reach 950 – 990 kboe/d in the second quarter, compared to 970 kboe/d in the first quarter.

Moreover, Shell announced post tax impairments of up to $3 billion for the second quarter, primarily driven by a one percent increase in the discount rate used for impairment testing.

Shell plans to publish its quarterly results on July 27.

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