GLNG: Shell lowers LNG estimates for fourth quarter of 2024

Supermajor Shell has lowered its forecast for LNG production in the fourth quarter of 2024, the company revealed in its update note on January 8.

The production forecast for LNG was cut to between 6.8mn tonnes and 7.2mn tonnes, marking a significant decline from earlier estimates of between 6.9mn tonnes and 7.5mn tonnes. Fourth quarter results will be announced on January 30.

In the third quarter of 2024, the London-headquartered firm produced 7.5mn tonnes of the super-chilled fuel.

Shell attributes the drop in production forecasted to fewer deliveries of cargoes as well as a reduction of feedgas supply to produce LNG.

It also cited the expiration of hedging contracts it had signed in 2022 to safeguard the firm against a loss of Russian production following its invasion of Ukraine in February 2022, as another contributor to the lowered outlook for its LNG division.

Meanwhile, the weaker forecast for LNG production was also matched by estimates that oil and gas trading in the fourth quarter will also be lower for the firm than in the third quarter of 2024.

Shell is the world's largest trader in LNG and has been bullish on the long-term outlook for the super-cooled gas.

In February 2024, Shell predicted that demand for LNG would climb 50% globally by 2040. Expanding demand in Asia, especially China, which is the world's largest importer of LNG, has been identified as the biggest driver for demand growth of the super-chilled fuel in the decades ahead.

As Asian nations seek to lower their carbon footprint and shift from coal to natural gas as part of their energy transition, Shell sees LNG as a key bridge fuel.

Shell has predicted that global demand annually for LNG will soar to between 625mn tonnes and 685mn tonnes by 2040. In 2023, global demand for LNG stood at 404mn tonnes per year.

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