Shell Energy Solutions announced a historic $2.4 billion gain in LNG trading in the final quarter of 2023, with Liquefied Natural Gas (LNG) accounting for nearly one-third of its adjusted earnings in the fourth quarter.
A historic gain in LNG trading
The company beat consensus expectations with adjusted earnings of $7.3 billion for the fourth quarter, driven by strong results in LNG marketing and optimization . However, Shell did not disclose the specific contribution of LNG trading to its earnings and a company spokesman declined to comment.
During the last quarter of 2023, many arbitrage opportunities were observed between the Atlantic and Asia, which benefited Shell’s LNG trade performance, according to CEO Wael Sawan.
Global LNG market projections and growth
Shell Energy Solutions maintains a positive outlook on long-term “liquefied natural gas” demand and considers it critical to its business, according to its annual LNG outlook. The company projects a 50% increase in global LNG demand by 2040, driven primarily by Asia, where a greater shift from coal to gas and increased consumption of LNG as a fuel is expected.
Then, the company forecasts continued growth in the global LNG market through the 2040s, especially due to industrial decarbonization in China and rising demand in other Asian countries, according to its report Shell LNG Outlook 2024.
Although some regions have peaked in natural gas demand, Shell expects global gas demand to peak after the estimated date. However, this is at odds with recent projections by the International Energy Agency.
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Source: Shell Energy
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