Shell lowers LNG output forecast after cyclones disrupt production

In Australia, Shell has reported a decrease in its forecasts for liquefied natural gas (LNG) production for the initial months of 2025. The estimation is now set at between 6.4 million and 6.8 million metric tonnes, a decline from the prior forecast of 6.6 million to 7.2 million tonnes. This adjustment is attributed to the impact of cyclones and unexpected maintenance that took place at some of its assets in the region. Such natural events underscore the vulnerability of energy production to climatic conditions. The fossil fuel giant is recognized as the world’s leading LNG trader. Recently, it announced an ambitious strategy to increase its sales of LNG by 4% to 5% annually until 2030. This goal forms part of a broader plan aimed at enhancing shareholder returns, reflecting the intensified pressure on oil and gas companies to increase profitability and reduce climate pledges. In an effort to boost its financial performance, Shell indicated during March that it would prioritize cost savings and reduce capital expenditure. The corporation aims to generate a cumulative savings of between five billion and seven billion US dollars annually by 2028, highlighting a shift towards delivering more value while lessening emissions. This move comes amidst previous critiques over weakened commitments to carbon reduction from the previous year. In addition to adjusting its LNG outlook, the company reported recoveries in its indicative refining margins over the three months ending in March, following a slump the year prior. Historically, energy companies like Shell and BP have faced dwindling profit margins within their oil refining operations, heavily affected by downturns in global oil demand across both consumer and industrial sectors. Shell noted an indicative refining margin of 6.2 US dollars per barrel, a recovery from the 5.5 dollars per barrel margin seen in the last quarter of 2024.