Shell Plc's Chief Executive Officer Wael Sawan has unveiled the company's new strategy, which aims to pave the way for a sustainable future for natural gas. The company sees natural gas as a crucial component of the global energy mix and will expand into key growth markets. The plan encourages the company's Liquefied Natural Gas (LNG) teams to do more business in China and India and will offer higher bonuses for deals that are struck in those target nations and others.
Shell will also examine investment opportunities for LNG export facilities or long-term supply deals, with a focus on reducing emissions by using carbon capture and storage methods. The company will also put more emphasis on hydrogen.
Cederic Cremers, an executive vice president for LNG at Shell, said in an internal memo seen by Bloomberg News, "We have always known that gas is crucial for the energy transition, but our new strategy is built around a new belief — that gas will continue to play a key role in the energy mix."
The company's new strategy comes after the performance of Shell's integrated gas business helped boost the first-quarter profit, and follows last year's record annual performance when LNG was boosted by Russia's decision to cut pipeline supplies to Europe. While the wider energy sector reassesses the pace of its shift away from fossil fuels, Shell will keep oil output steady or slightly higher into 2030, scrapping annual production cuts, according to a Reuters report last week.
Similar to BP Plc and Chevron Corp.'s corporate strategies, Shell sees natural gas as a part of a global future energy mix that is not just a shorter-term transition fuel to cleaner energy sources but a critical component in a long-term strategy to reduce emissions and combat climate change.
Shell's plan also includes an exit from businesses that aren't producing adequate returns, with the renewable power division being told to focus on delivering lower carbon emissions while also becoming more profitable.
Shell's renewed commitment to expanding its LNG business and reducing emissions has been met with some resistance from investors and activists, who have raised their voices against any attempt to weaken climate change goals. Shell's annual meeting last month was disrupted for over an hour by protests, including calls for the company to invest more in renewable energy.
Overall, Shell's refreshed LNG strategy aims to build a more sustainable future for natural gas by focusing on reducing emissions, hydrogen, and improving profitability in the renewable power division.