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Shell CEO Confident on Long-Term LNG Demand

Shell CEO Confident on Long-Term LNG Demand

Shell Plc remains confident on the long-term outlook for LNG demand, especially in Europe, despite recent supply constraints, the company’s CEO Ben van Beurden and CFO Sinead Gorman concurred during a virtual webcast with various media outlets.

Shell’s LNG trading and optimization was “impacted by a combination of seasonality and supply constraints, where the business is geared towards supplying the northern hemisphere during the winter,” the company revealed in its third-quarter results.

Van Beurden continues to see LNG as a long-term growth segment with typical growth of 4% per annum and thinks the figure could be higher given higher energy consumption in Europe. In parallel with higher energy demand, the company has boosted its positioning in LNG in projects in Qatar from the North Field South and North Field East developments to Mexico, the executive said.

“We’ve signed up 8 million tons of new supplies for our portfolio coming on stream in the course of this decade. And we are very confident that LNG, of course, is going to be needed,” van Beurden said.

Shell has started commissioning a new LNG import terminal in the Netherlands “on the back of the confidence that we have in there being a long-term demand for LNG in Europe,” he added.

“And indeed, some of these long-term demands are in the form of long-term contracts as well. So yes, we stay with our confidence in the sector, particularly also in Europe,” he said.

Moscow’s military invasion in Ukraine earlier this year and the resulting geopolitical flare up has resulted in fewer oil and gas supply flows into Europe and the U.K. The situation has forced Russian energy dependent regions to pivot quickly to seek out other supply sources, such as U.S. LNG imports, to fill the immediate supply gaps that are likely to remain this winter and next, many energy and political pundits agree.

Shell continues to assist in the filling of gas storage in Europe ahead of winter, said Gorman, the company’s CFO, while adding that it is also taking initiatives to reduce its gas usage.

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