Shell has lowered its liquefied natural gas (LNG) production outlook for its fourth quarter as the oil and gas giant warned that trading would be “significantly lower” than Q3.

The company is the world’s largest LNG trader and said gas volumes are anticipated to be down on the previous quarter, in part due to fewer cargoes in the last three months of 2024.

Shell released a trading update today ahead of its full-year results which are due to be published on 30 January.

The group indicated that its gas output will also likely be down in Q4, owing to planned maintenance at a plant in Qatar.

Shell warned it would take $1.5bn to $3bn of non-cash, post-tax impairments, including up to $1.2bn in its renewables division, linked to European and North American assets. This is in part due to the expiry of hedging contracts that Shell took out in 2022 and 2023 to protect itself from potential price risks in the wake of Russia’s invasion of Ukraine.

Investment director at AJ Bell, Russ Mould, described Shell’s leading position in LNG as a “key attribute which makes it stand out from its peers”, and said reduced production and volume guidance would be “disappointing for the market”.

“The company’s usual teaser ahead of its quarterly results will have done little to whet appetites for the main event, with its trading business also in the mire and the timing of payments for emission certificates and an airline fuel duty payment in Germany hitting cash flow and working capital,” Mould said.

“These aren’t the kind of messages CEO Wael Sawan wants to be delivering to the market at a time when he is desperately trying to close the valuation gap with Shell’s US peers.

“The commodity price backdrop wasn’t helpful for Shell in the last quarter of 2024, but oil prices have been gaining ground in the early weeks of 2025 amid declining OPEC production and continuing signs the US economy remains robust.”

---