Higher than Normal LNG Prices Cause Demand Destruction: Shell

Global LNG prices have decreased significantly but are still high on a historical basis, which is resulting in demand destruction, particularly in Asia, an executive from Shell said.

• Market sentiment has improved over the last year, but conditions are still potentially fragile, Steve Hill, Shell’s executive VP, said.
• "The sentiment in the market today is clearly a lot better than last year, prices are much lower, there's more comfort in the market, but we potentially still have quite a fragile set of market conditions," Hill said.
• Vitol CEO Russel Hardy said this week that LNG spot prices will be at the $13-15/mmBtu level this winter, which will mean Asian buyers in Pakistan and partly in India and China will make choices not to take LNG at these prices and replace LNG with other fuels.
• Shell is looking to increase its LNG volumes by 20% to 30% by the end of the decade, Cederic Cremers, executive VP of Shell's LNG business, said. The majority of additional capacity will come from the phase 1 of LNG Canada, two projects in Qatar and an additional LNG train in Nigeria.
• Shell’s Prelude floating LNG facility in Australia started major turnaround in August and will be under maintenance for around two months, Cremers added.