Shell lowers Q1 LNG production guidance amid weather and maintenance issues

Shell has revised its first quarter (Q1) liquefied natural gas (LNG) production outlook, citing the impact of adverse weather and unplanned maintenance in Australia.

The British company now expects LNG liquefaction output to range between 6.4 million tonnes (mt) and 6.8mt, down from an earlier forecast of 6.6mt–7.2mt.

In comparison, the company reported producing 7.1mt of LNG in Q4 of the previous year.

Despite these challenges, Shell expects its gas division trading results to be consistent with the previous quarter, although there will be a higher non-cash impact from expiring hedge contracts.

Shell has also adjusted its production outlook for its integrated gas division to 910,000–950,000 barrels of oil equivalent per day (boepd), down from the previous 930,000–990,000boepd.

This adjustment is also due to unplanned maintenance, including in Australia.

In the marketing business, Shell expects a lower contribution from its speciality products and services, which encompass low-carbon energy solutions for aviation and marine industries, to affect quarterly results.

Additionally, the company has narrowed its upstream oil and gas output forecast to between 1.79 million barrels of oil equivalent per day (mboe/d) and 1.89mboe/d, compared with a previous projection of 1.75mboe/d–1.95mboe/d.

Shell Eastern Trading, a subsidiary of Shell, recently finalised the acquisition of Pavilion Energy, enhancing its position in the LNG market.

This acquisition includes Pavilion Energy's LNG portfolio, with a contracted annual supply volume of approximately 6.5mt.

The integration of Pavilion Energy’s assets aligns with Shell’s objective to grow its LNG sales by 4–5% annually until 2030.

Furthermore, Shell Brasil, another subsidiary, has reached a final investment decision on the Gato do Mato project, a deep-water development in Brazil's pre-salt Santos Basin.

Shell holds a 50% stake in this consortium alongside partners Ecopetrol (30%) and TotalEnergies (20%), with Pré-Sal Petróleo managing the production sharing contract.

The Gato do Mato project will feature a floating production storage and offloading vessel designed to produce up to 120,000 barrels of oil per day.

"Shell lowers Q1 LNG production guidance amid weather and maintenance issues" was originally created and published by Offshore Technology, a GlobalData owned brand.

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