Shell LNG trading provides quarterly boost despite production decline by Reuters

Shell LNG trading provides quarterly boost despite production decline by Reuters

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©Reuters. General view of a Shell petrol station sign in Milton Keynes, Britain January 5, 2022. REUTERS/Andrew Boyers 2/2

By Ron Bouso

LONDON (Reuters) – Shell’s (LON:) liquefied natural gas (LNG) trading revenue is likely to have been significantly higher in the fourth quarter of last year despite a sharp drop in production due to plant outages, it said on Friday.

The update from Europe’s largest oil and gas company ahead of its full-year results on February 2 also said it expects to pay about $2 billion in additional taxes in 2022 related to European Union and UK windfall taxes , which are imposed on the energy sector.

Fourth-quarter LNG liquefaction volumes are expected to be the lowest since the company acquired BG Group in 2016 for $53 billion, falling to 6.6 million to 7 million tonnes due to prolonged outages at two major plants in Australia .

But Shell, the world’s top LNG trader, said its LNG trading results will be “significantly higher” than the previous quarter.

Shell shares were up nearly 1% on market open.

Shell’s third-quarter results were impacted by weaker refining performance and a slump in LNG trading.

The LNG trading division posted a loss of nearly $1 billion in the third quarter after traders were caught off guard by a sharp rise in European gas prices as Russia halted supplies.

Still, Shell remained on track for a record full-year profit in 2022 after posting a profit of $30 billion in the first three quarters, just short of 2008’s record profit of $31 billion.

Shell expects fourth quarter trading results for oil products to be “significantly lower” than third quarter.

GRAPHIC: Shell LNG production (

London-based Shell, whose chief executive Wael Sawan succeeded Ben van Beurden on January 1 after nine years at the helm, said in October that it intends to increase its dividend by 15% in the fourth quarter.

Several governments across Europe and the UK have imposed windfall taxes on energy companies this year to curb excessive profits as energy prices have skyrocketed since the Russian invasion of Ukraine.

Shell expects to pay $2 billion in taxes related to the unexpected levies, in addition to the $360 million announced in early 2022.

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