Shell LNG volumes spur quarterly earnings rise

Shell’s Integrated Gas (LNG) division generated $3.68bn in earnings in the first quarter with liquefaction volumes rising 0.5MT to 7.6MT.

The energy major – reporting adjusted earnings of $7.7bn in the first three months of 2024, up from $7.3bn in Q4 2023 – said trading was strong, even if significantly lower than the “exceptional” fourth quarter, and it continued to capture high margins from global product supply disruptions, as market volatility continues. Overall adjusted EBITDA increased to $18.7bn.

Second quarter liquefaction volumes are forecasted in the 6.8-7.4MT range, and the 14 Mtpa LNG Canada T1-2, in which Shell has a 40% share, is among the projects due for start up in 2024/25. Three projects, NLNG T7, Qatar Energy LNG NFE (2) and NFS (2), are scheduled to launch from 2026 onwards.

CEO Wael Sawan said the quarterly performance demonstrated its “continued focus on delivering more value with less emissions.”

Renewables & energy solutions’ external sales rose from 68TWh to 77TWh with operational capacity rising from 2.5GW to 3.2GW, following the launch of the Crosswind offshore wind project in the Netherlands. Another highlight saw the start of production at Rydberg in the US Gulf of Mexico.

Subsidiaries Shell Wind Energy and Savion Equity completed the previously announced sale of partial ownership stake in two US-based renewable energy projects to InfraRed Capital Partners. The agreement covered the sale of the 60% interest in Brazos Wind Holdings, an onshore wind farm in Texas, and 50% interest in Madison Fields, a solar development in Ohio.

CFO Sinead Gorman said, “We continue to focus on every electron and molecule to help us deliver on all our targets.”

Results were also buoyed by chemicals and products, whose sales volumes rose from 2,588kT to 2,883kT with manufacturing plant utilisation rising from 62% to 73%. Shell said the results “give us confidence” to start another $3.5bn share buyback programme for the next quarter.

At its Annual General Meeting on May 21, shareholders will be asked to support its Energy Transition update and she urged them to vote against alternative resolutions.

Shell proposes to invest $35bn in Downstream and Renewables & Energy Solutions, with $10-15bn directly into low carbon energy solutions (including hydrogen and CCS), and halve its Scope 1 and 2 emissions by 2030. Its cash capex outlook remains unchanged at $22-25bn.

“These investments are helping our customers decarbonise,” said Gorman. “With this in mind we have set a new ambition to reduce customer emissions … by 15-20% by 2030, compared with 2021.”