Shell Expects Higher Q3 LNG Output and Stronger Gas Trading

Shell plc SHEL, a London-based integrated oil and gas company, has released its third-quarter 2025 update, a detailed forecast of its operational and financial expectations for the period. The report, dated Oct. 7, 2025, offers an insight into how one of the world’s largest integrated energy companies is positioning itself across the key business segments. While the numbers are preliminary and subject to change when final results are published on Oct. 30, the company reveals important trends in production, margins and strategic focus areas.Integrated Gas: Strong LNG MomentumShell’s Integrated Gas segment is expected to maintain robust performance in third-quarter 2025. Production is forecasted in the range of 910-950 thousand barrels of oil equivalent per day (kboe/d), slightly up from 913 kboe/d in the second quarter. More notably, LNG liquefaction volumes are projected to rise in the band of 7-7.4 million tons (“MT”), up from 6.7 MT in the previous quarter. This reflects Shell’s continued leverage of its global LNG infrastructure and trading capabilities.The company also anticipates that Trading & Optimization results will be “significantly higher” than the second quarter, highlighting the segment’s role as a key earnings driver.Upstream: Production Uptick With Brazil ImpactThe Upstream division shows a notable increase in production expectations, 1,790-1,890 kboe/d, up from 1,732 kboe/d in the second quarter. This indicates operational improvements and possibly fewer unplanned outages. However, the segment is not without its challenges. Shell expects adjusted earnings to take a $0.2-$0.4 billion hit due to the rebalancing of participation interests in Brazil’s Tupi field. This reflects the finalization of a redetermination process submitted to Brazil’s National Agency of Petroleum, Natural Gas and Biofuels. Despite this one-off impact, the underlying production growth signals resilience in Shell’s conventional energy portfolio.Marketing: Volume Dip but Earnings ImprovementMarketing sales volumes are projected to be in the range of 2,650-3,050 kb/d, down from 2,813 kb/d in the second quarter. Still, Shell expects the segment’s adjusted earnings to be higher than the previous quarter. This implies better margins or cost management, even amid slightly lower volumes. Underlying Operational Expenditure (underlying opex) is expected to remain stable, reflecting disciplined operational control.Chemicals & Products: Refining Strength, Chemicals WeaknessA mixed picture emerges in Chemicals & Products. The indicative refining margin is projected to rise to $11.6/barrel (bbl) from $8.9/bbl in the second quarter, reflecting stronger global demand for refined products. Refinery utilization is also expected to remain high, between 94% and 98%. In contrast, the chemicals margin is forecasted to dip to $160/ton and Shell anticipates an adjusted loss in the Chemicals sub-segment. This divergence highlights the ongoing challenges in the chemicals market, including oversupply and weaker demand, even as refining benefits from tighter market conditions.Renewables & Energy Solutions: Still in TransitionRenewables and Energy Solutions (“RES”) continues to reflect the transitional nature of Shell’s low-carbon investments. Adjusted earnings are projected between a loss of $0.2 billion and a profit of $0.4 billion, indicating this segment remains volatile and not yet a consistent earnings contributor.Corporate and Group-Level HighlightsAt the group level, Shell expects payable tax to decrease in the band of $2.1-$2.9 billion from $3.4 billion in the second quarter. Working capital movements are projected to be between a loss of  $3 billion and a profit of $1 billion, reflecting typical quarter-to-quarter volatility. The company also notes a non-cash impairment of approximately $0.6 billion in the Marketing segment due to the cancellation of the Rotterdam HEFA project, a biofuels initiative, which will be reported as an identified item.Additionally, Shell expects a 0.4% increase in gearing due to new pension legislation in the Netherlands. This is a non-cash adjustment and will not impact net debt, but it does illustrate how regulatory changes can influence reported metrics.ConclusionShell’s third-quarter 2025 outlook paints a picture of a company in motion, leveraging strength in LNG and refining, managing headwinds in chemicals and Brazil and continuing to navigate the complexities of the energy transition. While near-term uncertainties remain, the update reinforces Shell’s focus on operational discipline and strategic flexibility. Investors and industry watchers will be closely observing the quarterly results on Oct. 30 to see how these projections translate into performance and what they signal for Shell’s path forward in a changing energy world.SHEL's Zacks Rank & Key PicksCurrently, SHEL has a Zacks Rank #3 (Hold).Investors interested in the energy sector might look at some better-ranked stocks like Canadian Natural Resources Limited CNQ, currently sporting a Zacks Rank #1 (Strong Buy), TechnipFMC plc FTI and Oceaneering International OII, holding a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.Canadian Natural is one of Canada's largest independent oil and natural gas producers, with operations spanning exploration, development and production across North America, the North Sea and Offshore Africa. The company focuses on a diversified portfolio of assets, including oil sands, conventional crude oil, natural gas and thermal in-situ operations. Canadian Natural is valued at $67.72 billion.  TechnipFMC is a global leader in oil and gas services, specializing in the design, engineering and construction of complex energy infrastructure projects. The company provides a wide range of solutions across the upstream, midstream and downstream sectors, including subsea systems, surface technologies and engineering services. TechnipFMC’s expertise enables energy companies to optimize production, improve efficiency and reduce environmental impact, making it a vital player in the evolving energy landscape. It is valued at $15.62 billion.  Oceaneering International is a global provider of engineered services and products primarily to the offshore oil and gas industry, specializing in remotely operated vehicles, subsea engineering and asset integrity management. The company combines advanced technology and expertise to deliver innovative solutions that enhance safety, efficiency and environmental performance in challenging marine environments. Oceaneering International is valued at $2.44 billion.  Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TechnipFMC plc (FTI): Free Stock Analysis Report Oceaneering International, Inc. (OII): Free Stock Analysis Report Canadian Natural Resources Limited (CNQ): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks