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Shell Q3 earnings to be hit by Hurricane Ida

October 08/2021

MOSCOW (MRC) -- Royal Dutch Shell warned of a USD400 million hit to third-quarter earnings from the damage caused by Augusts Hurricane Ida, said Hydrocarbonprocessing.

However, in an update ahead of quarterly results this month, the oil major also flagged a boost to cashflows from soaring natural gas and electricity prices. Gas and power prices have been surging as tight gas supplies have collided with strong demand in economies recovering from the COVID-19 pandemic.

Shell is the worlds top seller of liquefied natural gas (LNG), accounting for about 20% of global demand, though its sales have declined in recent months because of production problems.

The company said third-quarter cashflow at its LNG division is expected to be significantly impacted by large variation margin inflows on the back of the prevailing gas and electricity price environment.

Shell will be holding more cash from buyers as deposits in the face of the large fluctuations in gas prices. The cash will eventually flow back out as prices cool. Liquefaction in the quarter is expected to be between 7 and 7.5 million tonnes, the lowest since 2016, reflecting feedgas constraints and additional maintenance, Shell said. LNG earnings will, however, receive a boost from stronger trading results, it added.

As per MRC, Royal Dutch Shell has suspended scheduled repairs at a cracker on Pulau Bukom Island, Singapore due to measures to contain the spread of COVID-19. Shell has suspended repairs to its cracking unit due to staffing problems related to the tightening of measures to contain the spread of COVID-19 by the Singapore government. The original plan was to close the plant for about a week in the first half of October.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Royal Dutch Shell is an Anglo-Dutch oil and gas company headquartered in The Hague (Netherlands). Shell conducts geological exploration and production of oil and gas in more than 80 countries around the world. The company fully or partially owns more than 30 oil refineries. In addition, Shell owns a significant number of chemical plants, as well as the production of solar panels and other alternative energy sources.
Author:Anna Larionova
Tags:petroleum products, PP, PE, neftegaz, petrochemistry, Shell, Russia, USA.
Category:General News
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