An increase in liquefied natural gas (LNG) sales helped boost first quarter earnings for Royal Dutch Shell, which reported an overall 6% profit increase compared to the first quarter of 2006. LNG sales volumes of 3.30 million tonnes were 10% higher than the year-ago quarter, the company said. Additional sales at Nigeria LNG, where Shell is a 26% owner, led the increase that was complemented "by high plant reliability across all of our LNG joint venture liquefaction plants."
The higher LNG sales for the Shell Gas and Power segment helped offset lower marketing and trading results for that division compared to the first quarter in 2006. Earnings for the division were $803 million in 1Q2007 compared to $760 million a year ago. This year's earnings included net income of $39 million, reflecting gains of $110 million related to divestments and a charge of $71 million related to gas contract mark-to-market valuation.
Shell collected an average unit natural gas price of $7.20/Mcf in the United States during the quarter, more than $2 less than the $9.56/Mcf average for 1Q2006. And while its average price in Europe was $7.84/Mcf, up from $7.08 a year ago, Shell collected a lower average price around the world than the previous year, $5.21 in 2007 compared to $5.64 in 2006. Shell blamed milder weather for the drop in trading income.
Led by higher revenue from its downstream refining operations, as well as the LNG boost and lower taxes, Shell bucked the general industry downtrend, recording a $7.28 billion profit overall in 1Q2007. ExxonMobil also reported coming out ahead in the first quarter, recording net income of $9.28 billion (see Daily GPI, April 27).
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