By Andy Critchlow October 30, 2015
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Liquefied natural gas is taking the shine off Shell’s $70 billion takeover of BG Group. When the Anglo-Dutch major launched its deal in April, LNG was one of the main ways it justified the deal to investors. That line of argument doesn’t look so convincing now.
BG’s third-quarter results, released on Oct. 30, showed marketing and shipping of LNG taking a big hit. Despite the company revising higher its earnings expectations for the segment in 2015, revenue slumped 65 percent year-on-year, against a 9 percent top-line fall for the overall group.
That’s a problem. Long term, the combination will create the world’s largest LNG shipper with around 14 percent of the global market for the fuel, which is natural gas chilled to a liquid and then transported to customers by giant tanker. But Shell needs LNG to contribute in order to justify the 50 percent premium it offered in April to secure BG.
BG, for its part, remains confident that its LNG business will hit earnings guidance in the region of $1.4 billion this year. But the sector is under the gun to an even greater degree than crude oil prices, which have fallen by 43 percent since last October, and off which BG links most of its LNG contracts.
LNG markets have entered a deep downturn due to a mixture of global oversupply and rapidly weakening demand in Asia. BG Group estimates that global supply of the fuel will grow by 50 percent to around 375 million tonnes annually by 2020 as a series of LNG developments that have been decades in the planning come online. Compared with oil, complex LNG projects are harder to defer due to the long-term nature of the business.
Shell, which on Oct. 29 said it was taking a net charge of $7.9 billion on project writeoffs, is battling the oil slump as best as it can. If it was hoping BG’s LNG capabilities could brighten the otherwise grim outlook, it should think again.
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
