Shell plc’s Integrated Gas trading arm, which includes global LNG, is expected to report “significantly higher” sequential results for the final three months of 2023 “due to seasonality and increased optimization opportunities.”
The London-based major on Monday provided an update of its projected fourth quarter results, with solid operations from the world’s No. 1 liquefied natural gas trader. Shell is scheduled to issue its quarterly results on Feb. 1.
Integrated Gas production is forecast to be 880,000-920,000 boe/d in 4Q2023. LNG liquefaction volumes are expected to be 6.9-7.3 million tons (Mt). Shell previously had estimated liquefaction volumes would be 6.7 Mt.
During 3Q2023, Shell’s Integrated Gas volumes fell 9% year/year to 900,000 boe/d, with 4% of the decline from maintenance at the Prelude LNG export project in Australia. Issues at the Trinidad and Tobago gas project also had cut into the third quarter volumes.
Meanwhile, Shell’s LNG liquefaction volumes also dipped in 3Q2023, down by 4% year/year to average 6.88 Mt. LNG sales volumes, though, increased slightly to average 16.0 Mt from 15.7 Mt.
Shell also reported that its upstream oil and natural gas production volumes are forecast to be 1.82-1.93 million boe/d in 4Q2023. That is up from third quarter volumes of 1.75 million boe/d.
In the Marketing business, sales volumes were pegged at 2.35-2.75 million b/d for the fourth quarter, “in line with 3Q2023,” Shell noted. The Chemicals and Products segment, however, is expected to report an earnings loss in 4Q2023 with an indicative refining margin of $10/bbl. Refinery utilization for the period was pegged at 78-82%, reflecting “planned maintenance activities in North America.”
Shell also expects to record $2.5-4.5 billion in one-time impairments for 4Q2023 because of “macro and external developments, as well as portfolio choices.” The one-time charges included writing down Singapore assets, some of which Shell plans to sell.
ExxonMobil and Chevron Corp. in their recent fourth quarter projections, also said they plan one-time writedowns, most of which are related to U.S. assets.
Shell’s expected results in the fourth quarter pointed toward “slight improvements across in operations…partially offset by weaker-than-expected utilization in chemicals,” according to Tudor, Pickering Holt & Co. analyst Jeoffrey Lambujon.
