LNG giant Shell is expecting “significantly lower” trading and optimization results for its integrated gas business in the third quarter of this year compared to the previous quarter.
Shell said in its third-quarter update note on Thursday this is due to “seasonality and substantial differences between paper and physical realization in a volatile and dislocated market”.
According to the firm, indicative refining margins dropped to $15 a barrel compared with $28 a barrel in the previous three months.
This drop would have a negative impact of between $1 and $1.4 billion on the chemical and product’s adjusted earnings before interest, taxes, depreciation and amortization, it said.
The company expects LNG liquefaction volumes to be between 6.9 and 7.5 million tonnes, in line with the previous forecast.
Shell posted record high adjusted earnings of $11.47 billion in the second quarter on the back of high oil and gas prices.
Also, the company’s integrated gas segment reported a jump in earnings. The segment earned $8.1 billion, compared to $965 million in the same period a year ago and $3.07 billion in the prior quarter.
Shell plans to release third-quarter results on October 27.