NEWS
Shell's LNG sales volumes offset by charge
London, July 28 (LNG journal)
- London, July 28 (LNG journal) -- Royal Dutch Shell's gas and power earnings, which include liquefied natural gas, were just $11 million in the second quarter of 2005 compared to $334 million a year ago because of charges relating to the divestment of power generation assets.
"Earnings from higher LNG prices and volumes were more than offset by loss of earnings as a result of divestment of midstream assets and other items such as lower trading and LNG shipping results," Shell's earning's statement said.
Shell said LNG sales volumes rose 2 percent, however, to 2.48 million tonnes compared to 2.4 million tonnes in the same quarter a year ago.
This was a result of LNG expansion in the North West Shelf project in Western Australia which came on stream in late 2004, but was partially offset by planned major LNG plant shut downs elsewhere.
The results were the first since Shell became a unified company in July. Previously the group was co-owned by Dutch and British holding companies and executives were appointed to joint management board.
"Construction of new LNG trains in Nigeria and Oman continue to progress well," Shell said. Nigeria LNG trains 4 and 5, in which Shell holds a 25.6 percent stake, are expected to be in operation around the end of 2005.
Qalhat LNG in Oman , where Shell is a 10 percent stakeholder, is on target to deliver its first cargo in the first quarter of 2006, the statement added.
In the Shell 2005 outlook statement, the company said overall capital investment will reflect its recently announced opportunities such as LNG projects in Qatar , Nigeria and Libya , as well as market inflation specific to large construction projects.
Shell reiterated its previous guidance on capital expenditure for 2005 of $15 billion, despite doubling the expected cost of the Sakhalin-2 project off Russia's far east coast to $20 billion overall.
Chief Executive Jeroen van der Veer said during a press conference that Shell had to improve its project management skills, citing Sakhalin-2 cost projection overruns as an example.
