Shell PLC (NYSE:SHEL) shares are trading lower on Tuesday. The company’s subsidiary, Shell International Trading Middle East Limited FZE, penned a 15-year deal with Abu Dhabi National Oil Company (ADNOC).
The deal involves delivery of up to 1 million tons per annum (mtpa) of liquefied natural gas (LNG).
The LNG will mainly come from the Ruwais LNG project in Al Ruwais Industrial City, Abu Dhabi, where Shell owns a 10% stake via Shell Overseas Holdings Limited.
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Following this deal, over 8 mtpa of Ruwais LNG's 9.6 mtpa capacity is now secured through long-term contracts just 16 months after FID, covering Asia and Europe.
The agreement represents ADNOC's first long-term LNG sales deal with Shell and the eighth secured for the Ruwais LNG project, following the initial Sales and Purchase Agreement (SPA) announced at ADIPEC 2024.
Notably, in July 2024, ADNOC had reportedly allocated a 40% stake in its Ruwais liquefied natural gas (LNG) project to four energy giants, including Shell, TotalEnergies, BP, and Japan's Mitsui.
Sell executive vice president Tom Summers called the agreement “a significant milestone” to help expand the LNG portfolio.
Fatema Al Nuaimi, ADNOC CEO, added, "Securing over 80% of Ruwais LNG's capacity in just over a year from FID is a remarkable achievement that sets a new benchmark for large-scale LNG projects globally. While the industry can take up to four or five years to market such volumes, Ruwais is advancing at record pace. In parallel, construction, contractor mobilization, and site works are all on track for commissioning by the end of 2028."
Recent Key Events
On Monday, Shell reportedly planned to invest around $1 billion in new oil blocks in Angola. The chairman of the oil regulator stated that the move reflects the southern African nation's aim to boost production that has declined over the years.
Recent Earnings Release
Last week, Shell reported mixed third-quarter fiscal 2025 results, with adjusted earnings per American Depositary Share of $1.86, beating the $1.71 consensus estimate.
However, revenue fell short at $68.15 billion, compared with analysts’ forecast of $72.81 billion.
Price Action: SHEL shares are down 0.83% at $7379 at the last check on Tuesday.
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