Shell to suffer a $600m loss due to Rotterdam Biofuels Project Cancellation

Shell said Tuesday that it expects to take a $600-million hit from the abandonment of its Rotterdam biofuels project. However, it also noted higher production of liquefied gas and improved gas trading results.

Shell approved the development of an 820,000 metric ton per year biofuels facility in 2021. However, construction was halted last year. It was then scrapped completely last month due to its lack of competitiveness.

In a trading update on Tuesday, the company said it had raised its outlook for third-quarter LNG production from a range between 7 million and 7.4 million tons. It also expected trading results in its integrated division to be much higher.

Shell had previously estimated LNG production at 6.7 to 7.3 millions tons, according to the oil major in July. This compares to 6.7million tons for the second quarter.

Shell's net profit for the second quarter fell by about one-third due to lower gas prices and lower trading results.

Shell is trying to sell or find new partners for its chemical assets. It expects to lose money in its chemicals division.

It also warned of a $200-400 million loss from "rebalancing participation interests" on its Brazilian Tupi fields.

Shell's indicative refining profit margin rose to $11.6 a barrel in the third quarter from $8.9 a barrel in the previous three-month period.

The global benchmark Brent crude price averaged $68 per barrel in the quarter from July to September, compared to $67 during the second quarter and $79 for the same time period last year. Reporting by Stephanie Kelly, Shadia Nasralla and Kirsten Donovan. Editing by David Goodman.

(source: Reuters)