Shell expects a significant drop in its LNG production, trading, and oil trading activities for the fourth quarter of 2024, citing seasonality and the timing of shipments. The company shared this outlook in a statement on Wednesday.
In contrast, Shell reported stronger-than-expected earnings for the third quarter, driven by strong performance in its gas division, which helped offset weak refining margins in the downstream sector.
Looking ahead to the fourth quarter, Shell anticipates a $1.3 billion charge at the group level. This charge is linked to the timing of emissions certificate payments related to its fuel trading in Germany and U.S. biofuel programs.
Additionally, Shell expects to record up to $1.2 billion in non-cash post-tax impairments within its renewables and energy solutions division. This comes ahead of the company’s full Q4 results, scheduled for release on January 30.
In its Integrated Gas division, Shell predicts a decline in natural gas production in Q4, compared to the previous quarter, due to planned maintenance at the Pearl GTL facility in Qatar. LNG liquefaction volumes are also expected to be lower, impacted by reduced feedgas supply and fewer cargo shipments due to the timing of liftings.
Shell also expects a significant decline in trading and optimization results for its gas business, compared to the third quarter. This is primarily due to the non-cash impact of expiring hedging contracts.
Refining margins are expected to remain flat for Q4 compared to Q3, but Shell’s chemicals division will likely see a decline. The company forecasts a loss in adjusted earnings for its Chemicals segment in the last quarter of 2024.
Shell’s warning follows a similar announcement from U.S. oil giant ExxonMobil, which also expects weaker Q4 profits, largely due to lower refining margins. ExxonMobil estimates the negative impact on its profits to be around $1.75 billion.
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