Shell trims LNG production outlook for Q4, says O&G trading results to be lower

In a trading update ahead of its Q4 results, Shell (SHEL) said it expects Trading & Optimization results to be “significantly lower” than Q3, driven by the non-cash impact of expiring hedging contracts. Integrated Gas output is expected to be 880-920 BOE/d. Shell now sees LNG liquefaction volumes 6.8-7.2 MT. Q4 exploration well write-offs are expected to be ~$0.3B, Shell said. In Upstream, Shell said the share of profit of joint ventures and associates in Q4 is expected to be ~$0.3B, and exploration well write-offs are expected to be ~$0.4B. Net debt is expected to include $4B-$6B of new lease liabilities recognized in Q4, including the recognition of the LNG Canada pipeline liability. Shell noted that CFFO excluding working capital is expected to include an ~$1.3B outflow related to timing of payments of emissions certificates relating to the German BEHG and US Biofuel programs. Ahead of the market open, shares of Shell are down about 3%.