Shell, the world’s largest LNG trader, has warned that gas production and liquefied natural gas (LNG) sales will be lower in Q4 than the previous quarter in a trading update released ahead of its full year results on 30 January.
Shell’s stock price was down almost 2% after revealing this worse-than-expected performance from its integrated gas business.
The supermajor attributes the dip to the expiry of hedging contracts it took in 2022 to protect itself against a potential loss of Russian production following the invasion of Ukraine.
The news comes shortly after three UK pension providers, alongside the Australasian Centre for Corporate Responsibility (ACCR), filed a shareholder resolution with Shell challenging its LNG strategy.
The resolution calls on Shell to justify the assumptions behind its LNG growth strategy and explain how it aligns with the company’s climate commitments.
Shell plans to grow its LNG business by 20-30% by 2030, with LNG expected to account for nearly a third of the company’s upstream hydrocarbon production by the end of the decade.
As energy prices have steadied and global oil demand faltered, the world's top oil and gas companies have seen profits decline throughout 2024 following record earnings in the previous two years.
Shell’s largest rival Exxon Mobil Corp. signalled on Tuesday that sharply lower oil refining profits and weakness across all its businesses would reduce its Q4 earnings by about $1.75 billion from the prior quarter.
