Shell Share Discussion Threads

[sarkasm] 04/3/2018 07:08

Royal Dutch Shell to Investors: The World Needs (Lots) More LNG
The company's second annual LNG outlook reaches conclusions that oppose accepted thinking in the energy industry.
Maxx Chatsko
(TMFBlacknGold)
Mar 3, 2018 at 6:06PM

In an incredibly rapid yet somewhat overlooked shift, global trade volumes of liquefied natural gas (LNG) have doubled since 2005 -- and they're not done growing yet. Demand will continue to rise, and the countries lucky enough to be flush with natural gas reserves are racing to keep up with it.

The United States will boast 9.5 billion cubic feet per day (Bcf/d) of LNG export capacity by the end of 2019. That will make it the third-largest LNG exporter on the planet, right behind Australia and Qatar. While that alone is amazing, the U.S.'s overnight ascension up the global rankings is even more incredible: America had just 0.8 Bcf/d of export capacity at the start of 2016.

Judging by the supply growth in the U.S. and elsewhere, it seems the market will have plenty of LNG to go around. But an astonishing industry outlook published by Royal Dutch Shell (NYSE:RDS-A)(NYSE:RDS-B) sounded the alarm bells, concluding that the world soon won't have enough LNG production to meet demand. That flies in the face of what investors have been told over the years.

Is the world really headed for an LNG crunch?
Two ships sitting idle at port.

Image source: Getty Images.
Why Shell thinks an LNG shortage is possible

Countries around the globe have turned to LNG imports for various reasons -- sometimes to displace dirtier coal-fired power generation, sometimes to replace falling domestic production of natural gas, sometimes to lower geopolitical risk, and sometimes for all those reasons. Cheap and abundant natural gas reserves in Australia and the U.S. have made the global LNG boom possible, as have billions in investments planned years ago.

Royal Dutch Shell is a majority owner in a floating LNG (FLNG) facility hovering over the massive Prelude field in Australia, which is nearly 300 miles offshore. Meanwhile, Cheniere Energy (NYSEMKT:LNG), America's top LNG exporter, employs more traditional land-based liquefaction facilities along the Gulf Coast. The company actually embodies the national and global trends in the industry quite well.

Cheniere made huge bets a decade ago on the potential opportunity in LNG exports. It will see most of its production capacity (nearly half of America's total) come online between 2017 and 2019, and then it plans to kick back and let cash flows accumulate. According to Shell, that last part is the problem facing the global industry.

The awesome growth in global LNG trade, which reached 293 million metric tons in 2017, has been made possible by hundreds of billions of dollars invested in supply expansion. From 2015 to 2019, the world will add roughly 150 million tons per year of production capacity, including over 40 million tons of annual capacity expansion both this year and next. But a strange thing happens after that: Planned capacity expansions fall to virtually zero in 2020 and beyond.
A Chinese city in the background with energy infrastructure in the foreground.

Image source: Getty Images.

What's the reason? Well, it's not because LNG consumption growth stops. To the contrary, Royal Dutch Shell expects global LNG demand to nearly double again by 2035. Instead, the global energy leader points to a stalemate between the needs of producers and buyers.

Buyers are increasingly seeking smaller and more flexible volumes in order to make LNG more competitive for an expanding list of downstream applications, ranging from industrial use to vehicle fuels. From 2011 to 2014, the average LNG supply contract had a length of over 12 years and volume of over 1.3 million tons per year. From 2015 to 2017, those metrics slipped to just seven years and 0.7 million metric tons per year.

The problem is that producers have come to rely on signing massive long-term contracts up front in order to secure the financing needed to construct export terminals. That's because export terminals are incredibly expensive to build, and financiers want revenue certainty before handing over money. Case in point: Cheniere Energy may be barreling its way toward 4.5 Bcf/d of export capacity, but it had $25.3 billion (and counting) in long-term debt at the end of 2017.

Luckily, the stalemate doesn't appear to be bad news for investors. In fact, investors stand to win almost no matter what.
An aerial view of an LNG tanker at port.

Image source: Getty Images.
A boon for business?

While investors have become accustomed to seeing Cheniere Energy announce supply agreements lasting 15 years or longer, that will become increasingly rare going forward. The good news: America's largest LNG exporter will be largely unaffected by the shifting market dynamics for the foreseeable future. That's because 85% of the company's capacity -- including most of the expansions coming online between now and the end of the decade -- is entered into long-term contracts.

Things could get interesting as existing contracts begin to expire closer to 2030, but that's a pretty long time away. The supply crunch Royal Dutch Shell is warning against is expected to become a problem in the early 2020s.

In fact, given the mismatch between supply and demand, it may make sense for Cheniere Energy to reserve a certain portion of its production capacity for spot markets, where prices have periodically tripled those in long-term contracts. And the company seems to have left that door open, as the liquefaction trains at its Corpus Christi expansion project are smaller than those at its flagship Sabine Pass facility. That would be a win for investors, perhaps providing lucrative incremental income under the right market conditions.

Royal Dutch Shell's Prelude FLNG project should be able to fly above market turbulence, too, as it's smaller and close to the world's fastest-growing LNG markets in Asia. There's almost no set of market conditions under which it couldn't thrive.

Long story short, the changing dynamics in global LNG trade appear to have caused a dramatic underinvestment in new liquefaction capacity. That could create problems for supply sold on the spot market -- especially if prices skyrocket as product becomes scarce -- and affect planning and investment in new production facilities. But Cheniere Energy and Royal Dutch Shell should avoid the worst of the fallout. In fact, it could even be a boon for business.

[ariane] 03/3/2018 20:26

BASF, Dow Chemical, BP, Valero, Phillips 66, Shell, Univar, Albermarle Set to Share Their OpEx Journeys at IQPC's Conference on Operational Excellence in Refining & Petrochemicals

News provided by
IQPC

Mar 02, 2018, 10:26 ET

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HOUSTON, March 2, 2018 /PRNewswire/ --

Over 150 operations leaders from BASF, Dow Chemical, BP, Valero, Phillips 66, Shell, Univar, Albermarle and more are coming together this April 9-11 at the 2018 Operational Excellence in Refining & Petrochemicals Summit (Houston) to give an inside look at their operations.

Key speakers confirmed for this April include:

Michiel Van Noort, Global Head of Continuous Improvement, Downstream, Royal Dutch Shell
Hugo Ashkar, Global Risk Manager, BP
John Quigley, Director of Operational Reliability, Valero
Jim Wetherbee, Astronaut and Author, Controlling Risk: 30 Techniques for Operating Excellence
Patrick Wallior, Senior Director, Health & Safety, Univar
Manny Ehrlich, Board Member, U.S. Chemical Safety and Hazard Investigation Board
Nev Lockwood, Global Operational Excellence Director, Albemarle
Matt DiGeronimo, Vice President, Operations, Veolia

2017 attendee Change Management Leader at Duke Energy said: "I truly enjoyed attending the OpEx conference. Not only benchmarking opportunities, but networking and being able to continue to share best practices going forth."

With roundtables, panels, case studies and workshops on Human Factors, Process Safety, Asset Risk Management, Leadership & Culture, Procedure Management, Root Cause Analysis, Leadership and Behaviour, Management of Change and more, this event offers a unique opportunity to downstream professionals to learn from US and international industry experts who have successfully executed on strategy and delivered substantial improvements in operational performance.

Leslie Allen, Portfolio Director for the Operational Excellence event series comments: "With increasing volatility, competition, regulation and risk, there has never been a more critical time for refining and petrochemical companies to be focused on operational excellence. And that's why over 150 operations leaders are taking three days out of the office this April to attend the 2018 Operational Excellence in Refining & Petrochemicals Summit".

To find out more about North America's leading forum on Operational Excellence in Refining & Petrochemicals, download the 2018 agenda at

Tickets and full event program are available online at

SOURCE IQPC

[ariane] 03/3/2018 17:17

A rapidly shifting energy landscape being reshaped by new technologies and a revival of U.S. fossil-fuel production will dominate the agenda as the world's leading energy executives, government ministers and financiers gather in Houston next week.

Thousands of energy leaders, including the heads of Royal Dutch Shell PLC, BP PLC and Saudi Arabian Oil Co., will descend on Texas starting Monday for CERAWeek, the annual conference put on by IHS Markit Ltd. that has become a bellwether for the health of the global energy industry.

They will be joined by many of the world's top energy policy makers, notably OPEC Secretary General Mohammad Barkindo and several Trump administration officials, Energy Secretary Rick Perry and Interior Secretary Ryan Zinke.

Leaders of many other energy-related industries are also set to speak, including the chief executives of General Motors Co. and Siemens AG.

This year's gathering takes place amid a continuing recovery for oil prices, which passed $70 a barrel earlier this year for the first time since 2014, and have been over $60 for most of the year.

But concerns linger about whether the oil market is truly overcoming a glut as U.S. production continues to surge, thanks to shale drilling. For the second year running, Mr. Barkindo and U.S. shale producers are set to meet privately for dinner as they seek to learn about one another.

"The exporters, OPEC and non-OPEC, are trying to understand how this different kind of U.S. oil industry works," said Daniel Yergin, vice chairman of energy research at IHS Markit. "They're there to learn, because it's changed the nature of the oil market."

If the U.S. surges past Saudi Arabia to become the world's second-biggest oil producer behind Russia, as some forecasters predict, it could signal a fundamental change in a global pecking order that has been a basis for international energy policy for decades.

"The role of the U.S. in global energy markets has changed more dramatically than the public realizes," said Mr. Yergin, who serves as the event's master of ceremonies, co-hosting dozens of sessions on oil, natural gas, electric power and geopolitics. "It's a new form of influence for the United States in the world."

The conference will be packed with ministers from large oil and gas producers, including Norway, Kuwait, Nigeria, Canada, Mexico and the United Arab Emirates, as well as executives from Gazprom, Russia's largest gas company, and Saudi Aramco, which is in the middle of planning for an initial public offering.

A likely topic of discussion: whether top U.S. shale companies will abide by investor demands that they instill capital discipline and emphasize returns, or succumb to the allure of even more drilling at current prices. The heads of many top U.S. producers are set to speak, including Occidental Petroleum Corp., XTO Energy Inc., Pioneer Natural Resources Co. and ConocoPhillips.

Another major topic: how huge reserves of U.S. natural gas are also upending energy markets. The U.S. became a net exporter of natural gas in 2017, according to the U.S. Energy Information Administration, a trend fueled by exports to South America and Asia. Top executives from the companies at the heart of the gas export boom -- Cheniere Energy Inc., Freeport LNG Development LP, Tellurian Inc. and Venture Global LNG -- will discuss their plans.

A host of electric-power executives are set to speak as the utility industry experiences rapid changes, with coal and nuclear generation losing ground to gas, solar and wind. They include the heads of Duke Energy Corp., PG&E Corp., Exelon Corp. and Edison International.

The conference will also examine longer-term questions looming over the industry, including how digital technologies are fast changing the way companies produce oil and gas, and the differing outlooks for when electric vehicles and renewable energy will start to take a serious bite out of demand for oil and gas.

--Bradley Olson contributed to this article.

Write to Christopher M. Matthews at [e-mail]



(END) Dow Jones Newswires

March 02, 2018 21:06 ET (02:06 GMT)

[waldron] 02/3/2018 17:10

Shell A
2,249.5 -1.83%

Shell B
2,279.5 -1.21%

[waldron] 02/3/2018 08:35

Shell A
2,279.5 -0.52%



Shell B
2,298 -0.41%

[maywillow] 01/3/2018 18:55

Thursday 1 March 2018 2:35pm
Shell completes its deal to buy First Utility and puts Colin Crooks at the helm
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Courtney Goldsmith
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Shell is joining the UK's retail energy market (Source: Getty)

Oil major Royal Dutch Shell has completed its acquisition of one of the UK's biggest challenger energy suppliers and appointed Colin Crooks as its chief executive.

In December, Shell revealed it would buy First Utility in a deal thought to be worth £200m.

The energy supplier, which serves around 825,000 homes in the UK, will now become a subsidiary of Shell within its new energies division and be led by Crooks, previously Shell's vice president of downstream strategy and portfolio.

“The rapidly-evolving retail energy market is a natural place for Shell to expand its business, building on the trusted relationships we’ve built with our millions of forecourt customers. We aim to grow our customer base by offering an attractive range of products and a real alternative to other companies in the sector," Crooks said.

“Bringing such a well-respected and innovative company into the Shell group will enable us together to offer even more choice and value to consumers in the UK and Germany."

First Utility operates in the German household energy sector under Shell's brand under a licencing agreement signed in 2015.

The deal comes amid a turbulent time for the UK's retail energy suppliers. The government plans to cap energy prices by next winter to tackle the "broken" market, but critics have said the move could reduce competition and investment in the sector.

[waldron] 01/3/2018 17:07

Shell A
2,291.5 -0.41%



Shell B
2,307.5 -0.58%

[waldron] 01/3/2018 08:23

Shell A
2,298 -0.13%



Shell B
2,314.5 -0.28%

[waldron] 28/2/2018 16:55

Shell A
2,301 -0.07%



Shell B
2,321 +0.19%

[waldron] 28/2/2018 16:51

Shell sees potential LNG supply shortage as global demand surges

WEBWIRE – Wednesday, February 28, 2018

The global liquefied natural gas (LNG) market has continued to defy expectations of many market observers, with demand growing by 29 million tonnes to 293 million tonnes in 2017, according to Shell’s annual LNG Outlook. Such strong growth in demand is consistent with Shell’s first LNG Outlook, published in 2017. Based on current demand projections, Shell sees potential for a supply shortage developing in mid-2020s, unless new LNG production project commitments are made soon.

Japan remained the world’s largest LNG importer in 2017, while China moved into second place as Chinese imports surged past South Korea’s. Total demand for LNG in China reached 38 million tonnes, a result of continued economic growth and policies to reduce local air pollution through coal-to-gas switching.

“We are still seeing significant demand from traditional importers in Asia and Europe, but we are also seeing LNG provide flexible, reliable and cleaner energy supply for other countries around the world,” said Maarten Wetselaar, Integrated Gas and New Energies Director at Shell. “In Asia alone, demand rose by 17 million tonnes. That’s nearly as much as Indonesia, the world’s fifth-largest LNG exporter, produced in 2017.”

LNG has played an increasing role in the global energy system over the last few decades. Since 2000, the number of countries importing LNG has quadrupled and the number of countries supplying it has almost doubled. LNG trade increased from 100 million tonnes in 2000 to nearly 300 million tonnes in 2017. That’s enough gas to generate power for around 575 million homes.

LNG buyers continued to sign shorter and smaller contracts. In 2017, the number of LNG spot cargoes sold reached 1,100 for the first time, equivalent to three cargoes delivered every day. This growth mostly came from new supply from Australia and the USA.

The mismatch in requirements between buyers and suppliers is growing. Most suppliers still seek long-term LNG sales to secure financing. But LNG buyers increasingly want shorter, smaller and more flexible contracts so they can better compete in their own downstream power and gas markets.

This mismatch needs to be resolved to enable LNG project developers to make final investment decisions that are needed to ensure there is enough future supply of this cleaner-burning fuel for the world economy.

See Shell’s full LNG Outlook for 2018 at www.shell.com/lngoutlook

[montyhedge] 28/2/2018 13:00

Strong dollar weak pound, these will be back to 2550p in March.

[waldron] 28/2/2018 12:57

Shell A
2,313 +0.46%




Shell B
2,332 +0.67%

WOW

UP UP AND AWAY FOR END OF WEEK AND MONTH

DOES IT BODE WELL FOR MARCH

OR DO WE HAVE TO BEWARE OF THE IDES

[montyhedge] 28/2/2018 11:16

The dollar getting very strong again, good for UK dollar earners, Shell, GSK etc.

[waldron] 27/2/2018 16:59

Shell A
2,302.5 +1.05%



Shell B
2,316.5 +0.11%

A DIMINISHED PREMIUM AT ONLY 14p