According to Zhītōng Cáijīng APP, European energy giant Shell (SHEL.US) expects its second-quarter profit to be impacted by a~$2 billion write-down, due to the delay in the construction of a biorefinery in the Netherlands and a chemical plant in Singapore. At the same time, the company expects that its natural gas trading performance in the second quarter may slightly decline compared to the previous few quarters, due to seasonal changes in the market. However, the overall sales of the department are expected to remain largely consistent with last year's strong natural gas performance in the same period.

The energy giant announced earlier this week that it would suspend the construction of a biorefinery in Rotterdam, the Netherlands in order to find the best way to advance the large-scale project. According to Shell, the plant will produce sustainable aviation fuel and renewable diesel, in order to meet the growing demand for low-carbon renewable energy as the world moves towards net-zero emissions. Shell said in a statement on Friday that the decision to pause the Dutch project may result in a non-cash, tax-after impairment of $0.6 billion to $1 billion, and is expected to further write down the Singapore chemical and product facilities by $0.6 billion to $0.8 billion. Shell has agreed to sell them to a joint venture between commodity trading giant Trafigura and Indonesia's PT Chandra Asri Pacific.

In a statement on Friday, Shell said the decision to temporarily suspend the Dutch project could lead to a non-cash, tax-after impairment of $0.6 billion to $1 billion, and is expected to further write down Singapore chemical and product facilities by $0.6 billion to $0.8 billion. Shell has agreed to sell them to a joint venture between commodity trading giant Trafigura and Indonesia's PT Chandra Asri Pacific.

BP Plc has recently scaled back its plans to produce biofuels on a large scale at its Cherry Point refinery in the United States and its Lingen plant in Germany. Shell said the company remains committed to achieving net-zero emissions by 2050 and using shareholder capital in a "disciplined, disciplined way".

Since taking office in January last year, Shell's new CEO Wael Sawan has promised to ruthlessly improve the company's performance and increase investor returns. This process includes layoffs, asset sales, slowing the pace of carbon emissions reductions, and striving to increase the scale of share buybacks. Shell announced in May that it would buy back $3.5 billion worth of shares in the second quarter, matching the amount it bought back in the previous two reporting periods, and is expected to complete the buyback before the company announces its second-quarter performance in 2024.

According to the latest statement, due to seasonal changes in the market, Shell expects that the natural gas trading performance in the second quarter may slightly decline compared to the previous few quarters, but the overall sales of the department are expected to remain largely consistent with last year's strong natural gas sales performance in the same period.

In recent years, Shell's natural gas business unit has been the core driving force for the company's profit growth, mainly benefiting from the surge in market demand following Russia's withdrawal from the European natural gas market. The unit made huge profits during the period when the supply of natural gas to Europe was interrupted due to the 2022 Russia-Ukraine conflict, and achieved super large-scale profits by the end of 2023, with strong performance in the first three months of this year.

In the latest statement, Shell outlines its latest expected performance indicators before the final performance results on August 1, 2024. In the integrated natural gas field, Shell's latest expected production is between 940,000-980,000 barrels of oil equivalent/day, its liquefied natural gas production is expected to be between 6.8-7.2 million tonnes, and its total upstream production is expected to be between 1.72-1.82 million barrels of oil/day.