LNG Project Delays May Cut Shell’s Mid-Term, Spot Supply

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Mozambique, Canada delays limit portfolio supply from 2025
  • New LNG project supply is required from 2029 onward

Delays at two major liquefied natural gas projects could squeeze Royal Dutch Shell’s portfolio of supply between 2025-26. Supply will be enough to meet long-term contractual obligations, but the amount of spare volume that would be used for spot or mid-term sales is reduced.

Shell’s offtake from Mozambique LNG and LNG Canada will boost supply by 7.6 million metric tons a year when fully operational. Instability in Mozambique and pipeline cost disputes in Canada could reduce Shell’s available portfolio supply by 37% in 2025-26.

Originally intended to be online in 2024-25, those projects could be delayed into 2026. Expiry of legacy contracts from Equatorial Guinea, Trinidad & Tobago, Egypt and Nigeria could begin to squeeze Shell’s supply portfolio. Regardless of delays at the new projects, Shell’s portfolio balance may tighten and skirt deficit in 2029.

Shell could bank on new supply from the Rio Grande and Driftwood LNG projects, totaling 5 million tons a year. Both projects target a 2025 start, but have yet to be sanctioned.

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