Global liquefied natural gas (LNG) developments are starting to show positive earnings momentum for Royal Dutch Shell plc as its strategy to invest for profitability over volumes begins to pay off, CFO Simon Henry said Thursday.

The integrated gas segment, which incorporates LNG and gas-to-liquids operations, is part of Shell’s upstream business. However, LNG investments take lots of upfront money and a long pay-off period. Shell, one of the biggest LNG producers in the world, has a bevy of global projects now onstream, including Sakhalin-2, North West Shelf, Pearl, Qatargas 4 and Pluto (Woodside). Still in development is a massive export facility proposed with Asian partners for British Columbia’s west coast, stakes in Australian LNG and in various overseas ports. As well, Shell is integrating Repsol SA’s LNG business, which it bought earlier this year, and it’s made big investments in Peru and Atlantic LNG.

What’s onstream provided solid gains in 3Q2014, with LNG sales up 16% from a year ago to 5.68 million metric tons, Henry told financial analysts during the third quarter conference call.

Shell’s profits also jumped from a year ago by 24% to $5.27 billion (92 cents/share) from from $4.25 billion (71 cents), after stripping out the impact of price fluctuations, which measure the current cost of supplies. Cash flow from operating activities climbed to $12.8 billion from $10.4 billion. Upstream profits increased to $3.95 billion, from $3.29 billion, mostly on new project startups, lower expenses and higher LNG sales. The Americas upstream segment also improved, reversing year-ago losses to record a $500 million-plus profit.

The gains came despite big reductions in capital expenditures. Net capital investments were $4.8 billion in 3Q2014 from year-ago spending of $9.4 billion.

“We benefited from new, high-margin production, offsetting the effect of lower oil prices and lower volumes overall,” Henry said. “This is as a result of a strategy to invest for profitability, not simply volumes, and in fact some of our recent projects, such as Iraq gas and the Repsol LNG deal, come with financial uplift, but no equity production volumes.”

Price-wise, global liquids realizations were 8% lower in the quarter than in 3Q2013. Global natural gas realizations were down 7%, but in the Americas, there was a 17% increase from the year-ago period.

Quarterly production was 2.79 million boe/d, down from 2.93 million boe/d a year ago. Liquids production decreased by 4% and natural gas production decreased by 6%. However, excluding divestments and one-time costs, production was 2% higher. Underlying production was driven by increased high-margin liquids production in the Americas, including the impact of substantially lower downtime, partly offset by higher downtime elsewhere.

Shell wasn’t dented too much in the latest period by lower global crude oil prices, the CFO said. Around 65% of the company’s worldwide production revenue is linked to oil prices.

“A $10/bbl move in Brent equates to some $3.2 billion of earnings impact on an annual basis for 2014, and likely higher in 2015,” he warned. “Let me also note that there is a four-to-six month lag versus spot oil prices, especially in the LNG business.”

Cash flow on a 12-month rolling basis was $41 billion, with average crude prices of $107/bbl — well above current prices. If oil were to remain below $90, the effect will show up by the end of the year, Henry said.

“We don’t take a particular view on near-term oil prices,” he said. “We have a strong balance sheet and take a long-term view on financing and project economics. As you would expect from Shell, we are keeping the pressure on our spending and operating costs, and there may be opportunities to get better value from the supply chain here.”

Too much attention is paid to the oversupply of North American oil and not enough focus is given to the lack of global oil demand, the CFO said. “More important is demand,” he said. “Demand is weaker in emerging markets, which account for all of the growth in demand” given that economically developed countries’ oil consumption should remain flat or decline.

Shell’s investment strategy will remain geared toward crude oil prices of $70-110/bbl, and $70 represents what Shell expects to be the “likely” bottom.

Charles O. Holliday has been tapped as the new chairman to replace Jorma Ollila, who has held the position for nine years. Holliday, a former DuPont Co. CEO, is to take over next year.