Shell expects cash boost from soaring gas and power prices – Reuters

Shell expects cash boost from soaring gas and power prices – Reuters

The Royal Dutch Shell logo is seen at a Shell petrol station in London, January 31, 2008. REUTERS/Toby Melville/File Photo

LONDON, Oct 7 (Reuters) - Royal Dutch Shell (RDSa.L) on Thursday said that soaring natural gas and electricity prices around the world will provide a significant boost to its cashflow in the third quarter.

In an update ahead of quarterly results this month, Shell also said that damage caused by August's Hurricane Ida will dent earnings by $400 million in the quarter.

Natural gas and electricity prices around the world have been driven higher as tight gas supplies have collided with strong demand in economies recovering from the COVID-19 pandemic. ,

Shell is the world's top seller of liquefied natural gas (LNG), accounting for about 20% of global demand, though its sales have declined in recent months because of production problems.

Liquefaction in the quarter is expected to be between 7 to 7.5 million tonnes, the lowest level since 2016, "reflecting feedgas constraints and additional maintenance", Shell said.

The company said that cashflow at its LNG division "is expected to be significantly impacted by large variation margin inflows on the back of the prevailing gas and electricity price environment".

Shell's upstream oil and gas production fell in