Shell reduces LNG production outlook and flags weaker trade

Shell has lowered its outlook for the second quarter for both its integrated gas division and liquefied gas production. It also guided for weaker results in trading, according to a quarterly report published on Monday before full results.

Shell's integrated gas division gave a production range of 900,000.0-940.000 barrels of oil-equivalent per day (boed), as opposed to the 890,000.0-950.000 boed given in its first quarter results.

The second quarter's LNG production will be between 6.4 and 6.8 million tons, up from a range of 6.3 to 6.9 millions tons.

Shell's spokesperson refused to provide any details when asked about the reasons for the reduced production guidance.

The largest LNG trader in the world also announced that its trading results for its integrated gas division will be lower than they were in the first three months.

Shell aims to increase LNG sales by 4%-5% annually over the next five year period, and production will grow by 1% per annum.

The company, however, increased the lower limit of its guided production from its upstream oil division from 1,56 million to 1,76 million boed. It is expected that the unit will record a write-off of $200 million for exploration.

The marketing division is expected to have a higher adjusted profit in the second quarter compared to the first, with sales volumes between 2.6 and 3 million barrels per daily (bpd), which is slightly lower than the previous guidance range of 2.6 to 3.1 millions bpd.

Shell is expecting to lose money in its chemical business due to unplanned maintenance work at its Monaca, U.S. plant. Shell's chemicals and products division saw a significant drop in trading compared to the first quarter. The division is not expected break even.

Shell will publish its full second quarter results on the 31st of July. Shell is due to publish its full second-quarter results on July 31.

(source: Reuters)