Shell sales increase in Q3 vs TotalEnergies due to higher Asian LNG prices
Ron Bousso & America Hernandez
LONDON, October 31 - Analysts and traders say that higher production and sales of liquefied gas in Asia helped Shell to outperform TotalEnergies in the third quarter. However, group profits for both companies were affected by a drop in oil refining.
Shell's quarterly profit of $6 billion beat forecasts by 12 percent, while TotalEnergies reported a profit of $4.1 billion that was slightly below expectations. Shell and TotalEnergies both reported quarterly profits that were down 70% and 82%, respectively. Their oil refining businesses and their chemicals businesses also suffered losses.
Shell's LNG sales in the third quarter of 2013 increased 6.4% compared to a year ago. TotalEnergies LNG sales dropped 9.5% in the same time period. This was partly due to a planned outage at the Ichthys LNG facility in Western Australia.
Both companies have heavily invested in new production and distribution deals in the Gulf region, the United States, Australia, and other places.
Shell was the top LNG trader in the world last year, with nearly one cargo out of five traded. TotalEnergies was the third-largest trader in 2023, with a market share around 11%. Their trading divisions contribute to annual profits of billions.
Giacomo Romeo, an analyst at Jefferies, said that the rivals have different scales in various markets. Shell, for example, has a larger presence in Asia, which is a fast-growing region, while other companies are less present. TotalEnergies has a greater focus on Europe, Romeo said.
The demand for natural gas in Asia increased over the summer as a result of the increasing use of air conditioning. This pushed Asian benchmark prices up to a premium compared to European prices between mid-June and the end August.
Romeo stated that Total was less exposed to the LNG markets east of Suez and had benefited less from the strong Asian demand for LNG during the summer.
Total hopes to change this. Calculations show that Total signed six long-term LNG contracts with buyers in China and Singapore, India, South Korea, Turkey, South Korea, and Turkey, totaling 4.65 million tons.
Shell's Chief Financial Officer Sinead Gorman said to reporters that the LNG Division benefited from a "very good performance" as well as the sale of a number of LNG cargoes scheduled for delivery during the fourth quarter. Reporting by Ron Bousso, America Hernandez and Mark Potter.
(source: Reuters)
