popular articles

Shell and MET Group sign contract for 800,000 tonnes of LNG per year from 2026

Shell signs a 10-year contract with MET Group to supply 800,000 tonnes of LNG annually from 2026, strengthening European supply and diversifying its portfolio.

Please share:

Shell and MET Group have formalized a strategic agreement for the long-term supply of liquefied natural gas (LNG).
The 10-year contract calls for the delivery of 800,000 tonnes per year from 2026.
The main aim is to secure supplies for MET Group’s European customers and diversify their energy portfolio.
This agreement is a major step forward for MET Group, which is seeking to expand its presence in the Asian market.

A Strategic Agreement

The contract was signed at a price of approximately 119% of Henry Hub (HH) plus a constant of $2.70/MMBtu.
This pricing enables MET Group to strengthen the security of its European energy portfolio while exploring potential new markets in Asia. Shell, as the main supplier, will deliver the LNG from its portfolio in the Gulf of Mexico, USA.
This agreement enables MET Group to meet the growing needs of its customers in Europe, while exploring potential new markets in Asia.
This diversification strategy is crucial for the company to adapt to the changing dynamics of the global energy market.

Price Outlook and Market Analysis

Opinions differ as to the competitiveness of this contract.
One Singapore-based expert considers the price to be relatively low, pointing to a reduced margin and premium risk for US projects.
Conversely, another analyst specializing in long-term contracts deems the price fair, pointing to the absence of an equity component in the deal, which distinguishes it from other recent LNG contracts on an FOB (Free on Board) basis.
In comparison, the contract signed by Shenzhen Energy with Glencore for 500,000 tonnes of LNG per year from 2026-2027 is valued at %-121% HH plus a constant of $4.40-4.50/MMBtu on a DES (Delivered Ex-Ship) basis.
This price reflects an increase in LNG supply costs.

Market Indicators and Forecasts

According to the Henry Hub index future curve as at August 1, the Shell-MET Group contract price would imply an average value of $7.02/MMBtu on an FOB basis for 2027, based on Chicago Mercantile Exchange data.
By way of comparison, the Platts JKM index, which is the benchmark for LNG cargoes delivered in Northeast Asia, was valued at $10.325/MMBtu at the same date.
In addition, the North West Europe Marker index, representing the price of LNG cargoes delivered in North-West Europe, was valued at $11.475/MMBtu for the month of September.
These figures highlight the variations in LNG prices on different world markets, underlining the challenges and opportunities for companies involved in this sector.
This strategic agreement between Shell and MET Group illustrates how major energy companies are adapting their strategies to meet the growing and diversified needs of the global LNG market.
It highlights the complexity of negotiations and pricing in a constantly evolving sector.

Register free of charge for uninterrupted access.

Advertising

Recently published in

Guangdong LNG terminal begins commercial operations. ExxonMobil gains access to 1.8 million tons per year under a 20-year agreement with Guangdong Energy Group, marking a strategic milestone for its energy supply in China.
Natural gas producers are urging Kamala Harris to clarify her position on LNG exports and industry regulation, while uncertainty persists over political decisions relating to hydraulic fracturing.
Natural gas producers are urging Kamala Harris to clarify her position on LNG exports and industry regulation, while uncertainty persists over political decisions relating to hydraulic fracturing.
Belgium is pushing the European Union to adopt a coordinated ban on imports of Russian liquefied natural gas (LNG), arguing for a legal basis to speed up the phase-out of fossil fuels from Russia.
Belgium is pushing the European Union to adopt a coordinated ban on imports of Russian liquefied natural gas (LNG), arguing for a legal basis to speed up the phase-out of fossil fuels from Russia.
The Saint-Avold power plant, initially slated for conversion to biomass, is to be converted to gas. A strategic decision to meet the power grid's need for flexibility while limiting costs.
The Saint-Avold power plant, initially slated for conversion to biomass, is to be converted to gas. A strategic decision to meet the power grid's need for flexibility while limiting costs.
Technip and JGC Corporation have been commissioned to carry out the engineering for the Rovuma LNG project, an important milestone in the finalization of the project. The aim is to lay the foundations for a final investment decision expected in 2025.
National Grid concludes the sale of its remaining shares in National Gas Transmission, confirming its withdrawal from the gas sector to focus on electricity infrastructure.
National Grid concludes the sale of its remaining shares in National Gas Transmission, confirming its withdrawal from the gas sector to focus on electricity infrastructure.
Trinidad and Tobago chooses Shell to operate the Modified U(c) offshore gas block, reinforcing its strategy of stabilizing liquefied natural gas (LNG) supply in the face of declining domestic production.
Trinidad and Tobago chooses Shell to operate the Modified U(c) offshore gas block, reinforcing its strategy of stabilizing liquefied natural gas (LNG) supply in the face of declining domestic production.
Faced with dwindling water reserves, Brazil is stepping up its purchases of liquefied natural gas to maintain power generation, increasing pressure on the global LNG market this winter.
Faced with dwindling water reserves, Brazil is stepping up its purchases of liquefied natural gas to maintain power generation, increasing pressure on the global LNG market this winter.
The US energy sector is facing economic and political uncertainties, exacerbated by volatile commodity prices, prompting companies to slow investment in 2024 and review their strategies for 2025.
Category 3 Hurricane Helene is poised to hit Florida, exposing millions to power outages and disrupting gas production in the Gulf of Mexico.
Category 3 Hurricane Helene is poised to hit Florida, exposing millions to power outages and disrupting gas production in the Gulf of Mexico.
The Johan Castberg field launches a new phase of exploration in the Arctic, vital for Europe's gas future in the face of declining resources in the North Sea.
The Johan Castberg field launches a new phase of exploration in the Arctic, vital for Europe's gas future in the face of declining resources in the North Sea.
Iraq is aiming for gas self-sufficiency within five years, thanks to foreign investment and increased management of domestic production.
Iraq is aiming for gas self-sufficiency within five years, thanks to foreign investment and increased management of domestic production.
ICGB and DESFA strengthen Europe's energy infrastructure with a new interconnection agreement, facilitating gas flows in Greece, Bulgaria and beyond, in a context of diversification of supply sources.
Option volumes traded on the JKM reached 23,460 lots in 2024, compared with 14,660 in 2023. This increase illustrates a turning point in LNG market players' hedging strategies.
Option volumes traded on the JKM reached 23,460 lots in 2024, compared with 14,660 in 2023. This increase illustrates a turning point in LNG market players' hedging strategies.
Allied Energy and Enerhash USA exploit flared gas to power a Bitcoin mining infrastructure, an innovative project in the recovery of fossil fuels for technological applications.
Allied Energy and Enerhash USA exploit flared gas to power a Bitcoin mining infrastructure, an innovative project in the recovery of fossil fuels for technological applications.
The Cove Point LNG plant, operated by Berkshire Hathaway Energy, is suspending operations for planned three-week maintenance, temporarily disrupting natural gas flows.
The Cove Point LNG plant, operated by Berkshire Hathaway Energy, is suspending operations for planned three-week maintenance, temporarily disrupting natural gas flows.
Sasol and Eskom are exploring the option of liquefied natural gas (LNG) to boost South Africa's energy supply, marking a turning point in the diversification of energy sources.
In September 2024, Colombia recorded a significant increase in LNG imports to supply its thermal power plants, in response to falling water levels in its dams.
In September 2024, Colombia recorded a significant increase in LNG imports to supply its thermal power plants, in response to falling water levels in its dams.
Algeria is increasing its exports of liquefied natural gas (LNG) following maintenance work on the Medgaz pipeline, temporarily reducing flows to Spain while optimizing sales in the Mediterranean.
Algeria is increasing its exports of liquefied natural gas (LNG) following maintenance work on the Medgaz pipeline, temporarily reducing flows to Spain while optimizing sales in the Mediterranean.
Gas transit talks between Ukraine and Azerbaijan have failed to reach agreement. Both countries deny any negotiation concerning the use of Ukraine as a transit route to Europe after the end of the current contract with Gazprom.
Gas transit talks between Ukraine and Azerbaijan have failed to reach agreement. Both countries deny any negotiation concerning the use of Ukraine as a transit route to Europe after the end of the current contract with Gazprom.
Ukraine may need to import 0.6 Gm³ of gas before November, according to the IEA, to secure its energy reserves against the risks of a harsher winter.
Kimmeridge Texas Gas and Commonwealth LNG join forces with Glencore LTD in a 20-year strategic agreement to strengthen their position in the global LNG market. This collaboration marks a significant step forward in the energy transition.
Kimmeridge Texas Gas and Commonwealth LNG join forces with Glencore LTD in a 20-year strategic agreement to strengthen their position in the global LNG market. This collaboration marks a significant step forward in the energy transition.
Condor Energies Inc. takes a decisive step into liquefied natural gas production in Kazakhstan, receiving a second gas allocation for a low-carbon facility. This breakthrough supports the energy transition and modernizes the transport sector.
Condor Energies Inc. takes a decisive step into liquefied natural gas production in Kazakhstan, receiving a second gas allocation for a low-carbon facility. This breakthrough supports the energy transition and modernizes the transport sector.
East-West LNG arbitrage is gaining strength, with rising Asian demand outstripping European demand. Traders are taking advantage of this momentum to redirect cargoes to the Far East, despite uncertainties about future demand.
East-West LNG arbitrage is gaining strength, with rising Asian demand outstripping European demand. Traders are taking advantage of this momentum to redirect cargoes to the Far East, despite uncertainties about future demand.

Advertising