Shell Sees Weaker First-Quarter Results From Gas Trading

(Bloomberg) -- Shell Plc said its earnings from gas trading dropped in the first quarter, but remain high by historical standards. 

The London-based energy giant’s division that buys and sells natural gas has proved to be a major moneymaker since Russia’s invasion of Ukraine increased price volatility. That’s particularly true for the liquefied form of the fuel, where sales have also increased thanks to the completion of maintenance at key projects. 

In the final three months of 2023, Shell benefited from unusually lucrative trading opportunities plus higher volumes of liquefied natural gas. That helped the company beat analysts’ estimates and repurchase $3.5 billion of shares.

In the first quarter, gas trading and optimization results “are expected to be strong, but significantly lower than an exceptional fourth quarter,” the company said in a statement on Friday.

Shell sees LNG liquefaction volumes of between 7.2 million and 7.6 million tons in the first quarter, up from 7.1 million tons in the prior three months. 

Trading results at Shell’s chemicals unit — the worst performing division in the fourth quarter — are expected to be significantly higher in the first three months of 2024, the company said. Margins in the business were hammered by a global oversupply and weak demand at the end of last year.

Shell will publish its full first-quarter earnings on May 2.

(Updates with LNG volumes in fifth paragraph.)

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