Shell’s liquefaction and sales volumes fell to 7.1Mt and 15.5Mt respectively in the fourth quarter of 2024 as it posted overall earnings of $3.7bn – down from $6bn in the third quarter.
The latest LNG data compared with volumes and sales of 7.5Mt and 17Mt in the third quarter. The results come as little surprise as the drop in volumes was flagged in a market outlook three weeks ago.
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The energy major said first quarter 2025 liquefaction volumes are being impacted by lower feedgas supply, as it recorded full year earnings of $24bn, down from $28bn in 2023.
Source: Shell
CEO Wael Sawan said despite the lower quarterly earnings, cash delivery “remained solid” and it generated free cashflow of $40bn across the year, higher than in 2023, in a lower price environment. LNG, gas and power marketing and trading ($5bn) accounted for around a quarter of total cash capital expenditure in 2024 ($21.1bn).
He said he was “proud” of the discipline it has showed, which led to savings of $3.1bn by the year end.
Across 2024, the company abated more than 1 million tonnes of CO2 from operations.
But total scope 1 and 2 emissions were “roughly flat” compared with 2023 – the same for routine flaring – and methane emissions were “well below” its 0.2% target for 2025. Its spending on oil and oil products ($11.5bn) dwarfed the $2.4bn spent on low-carbon solutions, which is unlikely to go down well with the green lobby.
In its Integrated Gas portfolio, where adjusted earnings fell from $2.9bn to $2.2bn from third quarter to fourth quarter, it acquired Pavilion, entered into the Ruwais LNG project in Abu Dhabi, and took final investment decisions on a number of key projects such as Manatee in Trinidad & Tobago.
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Equinor UK and Shell UK recently announced they are combining their UK offshore oil and gas assets under a new 50:50 joint venture company.
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Yesterday, in petitions brought by Greenpeace, Scotland’s Court of Session ruled consent for Rosebank and Jackdaw fields was unlawful, pending more detailed assessment of the fields’ environmental impact, leaving the operators with choices on their next course of action.
“The decision as to which option to take will be a commercial decision for Shell, Equinor and Ithaca to take, taking into account the commercial risks involved, including the risk as to whether or not the consents will be granted on re-consideration,” according to Lord Ericht, in the Court of Session [paragraph 159].
In Renewables and Energy Solutions, Shell completed the acquisition of a combined cycle power plant in Rhode Island and continued developing the Holland Hydrogen 1 project, billed as Europe’s largest renewable hydrogen plant, in the Netherlands.
Speaking at a London conference in November, Andrew Beard, President of Hydrogen, said the US is well-suited to delivering blue hydrogen, with good natural and technical resources to deliver carbon capture and sequestration as a bolt-on to turn existing grey hydrogen plants blue. But the persistent challenge for green hydrogen remained “the cost stamp” it carries.
“That probably needs further policy developed to move the dial. We need a few more final investment decisions to be reached and the project count to climb to start to bring down the cost curve. This is a market in which incentives really matter,” he said.
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Global demand for LNG is estimated to rise by more than 50% by 2040, as industrial coal-to-gas switching gathers pace in China, and South Asian and South-east Asian countries use more LNG to support economic growth.
QatarEnergy and Shell have entered into a new long-term sale and purchase agreement (SPA) for the supply of three million tonnes per annum (mtpa) of liquefied natural gas (LNG) to China, with deliveries starting this month.
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LNG prices are forecast to ease in 2025 – settling at $14-15 MMbtu – after recording new lows in 2024, according to Drewry Shipping Consultants’ research.
However the stabilising outlook comes amid warnings about tight supply, sporadic seasonal spikes, ongoing geopolitical uncertainty and disruptions. Rates will still be lower in 2025/26 but likely recover in 2027 and peaking in 2028.
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Shell’s annual LNG outlook will be published on 25th February.
