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Shell offloads Norwegian

LNG business

NORWAY ROYAL Dutch Shell has shed its Norwegian Norway in 2019.
small-scale LNG supply business Gasnor to The Anglo-Dutch major is also pushing
Shell also warned Madrid-headquartered player Molgas, the oil ahead with a sweeping divestment programme.
last week it expected major reported on April 8, without disclosing
a $200mn loss from the deal’s value. Shell guidance
Texas cold snap Norske Shell will transfer its entire share- Shell also warned last week it expected to incur
disruptions. holding in Gasnor, along with all of its assets a $200mn loss to adjusted earnings in the first
and staff. The sale, closed on the same day as quarter from disruptions caused by an extreme
its announcement, draws a line under Shell’s 15 cold snap in Texas in February. The major also
years of involvement in the company. It became estimates that the storm led to a cut in its pro-
a partial owner in 2004 and acquired full owner- duction of 10,000-20,000 barrels of oil equivalent
ship in 2012 for $74mn. per day (boepd).
“Gasnor has been part of Shell since 2012 and In its trading update, Shell said it expected
we are proud of what the company has achieved. refined oil product sales to tally up to 3.7-4.7mn
Gasnor has been a pioneer in downstream LNG, barrels per day for the three-month period, ver-
with a leading position in small-scale LNG sus just below 4.8mn bpd in the final quarter
production and distribution in the domestic of last year. Earlier the company was targeting
gas market,” Norske Shell’s managing director, 4.5mn bpd of sales in the latest quarter. Shell is
Marianne Olsnes, commented. “Norske Shell the world’s biggest fuel distributor.
will continue to focus on key positions where we The utilisation rates at Shell’s refineries came
can leverage our differentiated capabilities in line to 71-75% in Q1 2021, versus an earlier projec-
with Shell’s strategy and net-zero target.” tion of 73-81%. The company’s margins saw an
Gasnor, headquartered in the Norwegian set- improvement to around $2.6 per barrel, from
tlement of Avaldsnes, controls three small-scale $1.6 in the previous three months.
LNG production plants in Norway and distrib- Shell also warned that its gas trading results
utes their production via tanker trucks and sea were expected to be “significantly below average.”
tankers. Its sale to Molgas, an LNG distributor LNG production is set to total 7.8-8.4mn tonnes,
owned by French investment group InfraVia, has versus 8.2mn tonnes in the previous quarter and
been backdated to January 1, 2020. an earlier forecast of 8.0-8.6mn tonnes.
The sale comes as Shell, like many of its peers, Overall upstream production is slated to
is looking at ways to make the transition towards come in at 2.40-2.48mn boepd, up from 2.37mn
lower-carbon energy. It also follows Shell’s dis- boepd in the fourth quarter but at the lower end
posal of the Nyhamna gas processing plant in of the forecasted range.™

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