UK-based LNG giant Shell sold 72.94 million tonnes of LNG last year, a rise of 11 percent compared to 65.82 million tonnes in 2024.
Sawan said during Shell’s fourth-quarter and full-year earnings call on Thursday that Shell previously set an aim of growing its LNG sales through to 2030 by 4 to 5 percent per annum — and last year, those sales grew by 11 percent, supported by the highest number of cargoes delivered in a single year.
“This record was supported by last year’s start-up of LNG Canada, where ramp-up to full capacity is continuing,” Sawan said.
“Constructive” demand
Asked about the LNG market during the call, Sawan said that “if I take the long-term perspective, if anything, we are seeing even more constructive demand for LNG.”
“We see it more and more playing the role of the stabilizing force in most energy systems. I mean, take Europe, for example. We do not have, of course, the coal assets of the past. Nuclear will take a long, long time to be able to bring in,” he said.
“As Europe shifts its energy system towards more intermittent renewable energy, you will need more and more of that stabilizing force, which, of course, LNG plays, and that’s demonstrated just this year by the fact that we have had record imports of LNG into Europe,” Sawan said.
“You consider now where we are also in the current cycle, even if you think short-term and mid-term. Just at the moment, we’re looking at storage levels in Europe at the low 40 percent, compared to the five-year average that is closer to 65 percent,” he said.
The CEO said that Europe would continue to play a big role.
“We see both China and India actually also still constructive on LNG, but at a certain price point, which is closer to the $8-$10 rather than above $10 (per MMBtu),” he said.
“I don’t think the Chinese or the Indians are averse to taking more LNG, but they want it at the right price point compared to the alternatives they have, which typically is domestic coal,” he said.
Diverse set of supply opportunities
The CEO said that he thinks “we are incredibly privileged to have such a diverse set of supply opportunities.”
“One of the best, of course, being LNG Canada, with AECO indexation that allows us to supply our markets, in particular in the East,” he said.
He also answered a question about the potential shutdown of some US LNG plants for a few weeks in the summer due to oversupply.
Shell has significant access to US LNG.
“I don’t know whether there will be shutdowns or not in the summer, depending on demand levels and the wave of supply and how quickly it comes. But I would say we are very well positioned, given that balance of diversified supply, diversified demand. We have multiple different in indexations to whether it’s Brent, TTF, we can sell on Henry Hub or AECO, and so on and so forth,” he said.
“So the cross-commodity exposure gives us opportunities to be able to create value out of the volatility that comes with that LNG market. So, do I expect a length in the LNG market? Who knows? There might be some, but we look through these cycles and create value over the long term for our shareholders,” Sawan said.
