Shell LNG Outlook 2024

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stated, implied or inferred from the forward-looking statements contained in this LNG Outlook.

Shell plc February 2024 2

Summary
Industry, heating and
emerging Asia to drive LNG Rising global demand for LNG
demand growth expected to keep pace with
new supply
 Demand for natural gas has peaked in some
regions and globally is set to peak after 2040.  In the medium term, latent demand for LNG –
especially in Asia – is set to consume new
 The global LNG market will continue growing supply that is expected to come onto the
into the 2040s, mostly driven by China’s market in the second half of the 2020s.
industrial decarbonisation and strengthening
demand in other Asian countries.  To offset falling domestic gas production in
South-east Asia, significant infrastructure
investment will be needed to access the LNG
Gas prices more stable in that these countries need for their economic
2023 but volatility lingered development.
in a tight market

 Global trade in LNG expanded slightly in

2023, with tight supplies constraining growth
and prices staying above historic averages.

 A milder winter, high gas storage levels,

modest economic recovery in China and
lower demand in Europe helped balance the
global gas market during 2023.

Shell plc
 1
Industry, heating and
emerging Asia to drive
LNG demand growth
 Gas use peaks in some markets, continues to grow globally
LNG to play increasingly important role in global gas supply

Peak gas demand by decade Gas demand by sector Natural gas supply source
BCM BCM
Russia
2040s+ CAGR
5.000 5.000
4.500 4.500
4.000 4.000
3.6%
3.500 3.500

Japan
3.000 3.000
-0.2%
USA 2030s 2010s 2.500 2.500
China 2040s 2.000 2.000
1.500 1.500
Indonesia 1.000 1.000 0.5%
Nigeria 2040s+
India 500 500
Regions 2040s+
2040s+ 0 0
2010s
2023 2040 2023 2040
2020s
South Africa Electricity Industry LNG
2030s Argentina
2040s Buildings Transport Pipeline imports
2040s+ 2030s
Other Domestic production

Source: Shell interpretation of Wood Mackenzie data

CAGR: Compound annual growth rate

Shell plc February 2024 5

Industry, buildings to be key demand drivers in emerging Asia
LNG expected to meet more than 75% of this growth

Emerging Asia natural gas demand Emerging Asia gas supply source
BCM BCM
CAGR
700 1.200

600 1.000

500
800
5.1%
400
600
300
4.4%
400
200

100 200 0.5%

0 0
2023 2040 2023 2040 2023 2040

2023

2025

2027
2024

2026

2028

2029

2032
2030

2031

2033

2035

2037

2040
2034

2036

2038

2039
Mainland China South Asia South-east Asia

Electricity Industry Buildings Transport Other Domestic Pipeline imports LNG

Source: Shell interpretation of Wood Mackenzie data

Shell plc February 2024 6

Industry must address CO2 emissions
Gases expected to play an important role in reducing sector emissions

Comparative emissions China exposure to EU CBAM Ways to decarbonise Chinese steel

Mt CO2/yr. 2022 %

0.4 $bn 100%

90%
China steel sector
80%
70%
Top 3 European emitters 60%
5.3 $bn
50%
40%
Japan 30%
20%
10%
Aviation
0%
17.3 $bn

International shipping

0 500 1,000 1,500

Germany UK Turkey Fertiliser Iron and steel Aluminium Gas-driven Gas-supported Other

Source: Shell interpretation of Wood Mackenzie, IEA data, Net Zero Roadmap for China’s steel industry study for Global Efficiency Intelligence & Lawrence Berkeley National Laboratory 2023
CBAM: Carbon Border Adjustment Mechanism. Value of Chinese exports to EU that will be covered by CBAM at implementation. CCUS: carbon capture, utilisation and storage (includes bio-energy CCUS). Three largest European emitters: Germany, UK, Turkey

Shell plc February 2024 7

Policy and investment continues for gas projects with
environmental and emissions benefits

Asia Infrastructure Investment Bank Energy demand and air quality in Beijing
energy project funding 2016 - 2023 BCMe Unhealthy days
$M
1.800 25 200

1.600 180

1.400 20 160
140
1.200
15 120
1.000
100
800
10 80
600
60
400 5 40
200 20
0 0 0
2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022

Electricity infrastructure Gas Green financing Renewable generation Gas demand Coal demand Unhealthy days

Sources: Shell interpretation of Asia Infrastructure Investment Bank data, Beijing Municipal Bureau of Statistics and Air Quality Index data
Unhealthy days: defined as an Air Quality index with PM 2.5 greater than 150 µg/m 3

Shell plc February 2024 8

Gas currently plays key role in meeting heating demand
Electrification will need investment, supply chain and buildings improvements

England and Wales buildings: gas* and total Buildings gas demand
electricity demand BCM (2022)
GWh/d

3.500

3.000

2.500

2.000

1.500

1.000

500

0
UK
Nov 2021
Nov 2020

Jul 2021

Nov 2022

Nov 2023
Mar 2019

Jul 2022

Jul 2023
Jul 2020
Nov 2018

Nov 2019
Jul 2019

Mar 2021

Mar 2022
Mar 2020

Mar 2023
Mainland China 33
European Union

Gas* Electricity** USA

Sources: Shell interpretation of UK National Grid ESO and UK National Gas data 2023, Wood MacKenzie data 2023
*Local Distribution Zones (low-pressure gas supplied to buildings) in England and Wales
** Total electricity demand for England and Wales

Shell plc February 2024 9

Renewables, supported by gas, erodes coal’s role in Asia

China South Asia South-east Asia

Capacity GW Generation share Capacity GW Generation share Capacity GW Generation share

7.000 70% 1.400 70% 1.000 80%

900
6.000 60% 1.200 60% 70%
800
60%
5.000 50% 1.000 50% 700
50%
600
4.000 40% 800 40%
500 40%
3.000 30% 600 30%
400
30%
2.000 20% 400 20% 300
20%
200
1.000 10% 200 10% 10%
100

0 0% 0 0% 0 0%
2022 2030 2035 2040 2022 2030 2035 2040 2022 2030 2035 2040

Coal Gas Nuclear Renewables Hydro Other % coal share % gas share

Source: Shell interpretation of Wood Mackenzie data

Shell plc February 2024 10

Gas provides grid stability, enabling a higher share of
renewables in generation

Variable hourly power generation in Spain Variable daily power generation in the Netherlands
GWh/h GWh/d

5.0 500
4.5
400
4.0
3.5 300
3.0
2.5 200
2.0
100
1.5
1.0
0
0.5
0.0 -100
18-Feb 19-Feb 20-Feb 21-Feb 22-Feb 23-Feb 23 24 25 26 27 28 29 30 01 02 03 2023
Nov Nov Nov Nov Nov Nov Nov Nov Dec Dec Dec

Gas Wind & Solar Hydro Nuclear Other Coal Gas Wind Solar Nuclear Other Imports Exports

Source: Shell interpretation of European Network of Transmission System Operators data 2023
Spanish figures calculated from 15-minute intervals
Other includes biomass, other renewables and coal

Shell plc February 2024 11

Marine sector continues to reduce emissions through LNG
Liquefied gases can combine with technologies to help reduce emissions

Vessel order book (2023) Projected LNG bunkering to 2028 Pathways to CO2e reduction
(Gross tonnage) (‘000 tonnes)

Lower-emission fuels
12,000
LNG BioLNG LSG
10,000

8,000

6,000
Conventional
4,000 Net
Hydrogen & derivatives
Zero
LNG 2,000
Other Efficient tech Future tech
0
2023 2024 2025 2026 2027 2028 Low methane slip engines –
Onboard CCS –
air lubrication – hull coatings
co-feeding H2
LNG-fuelled vessels – digitalisation – shaft power
537 on order
Bulkers Containerships generation – methane slip
engines – fuel cell
for main engine
Cruise Tankers mitigation / elimination

469 LNG-fuelled vessels

in operation
PCC, Ro-Ro, Ferries Others
Combined with new technologies

Source: Shell interpretation of Clarksons Research, DNV

Hydrogen & derivatives: methanol, ammonia, hydrogen, biofuel. Other: Ethane, LPG, nuclear. PCC: pure car carriers. Ro-Ro: roll-on/roll-off. Others: dredgers, ferries, multi-purpose, LPG, tugs. LSG: liquefied synthetic gas. Energy efficient technologies include air lubrication, shaft power
generation, digital technologies, wind technologies and improved hull coatings. Future Technologies include onboard carbon capture and storage, co-feeding hydrogen combined with dual-fuel LNG engines, fuel cell for main engine.

Shell plc February 2024 12

LNG decarbonisation pathways need to be explored together
To address emissions today and progress zero emission options
Carbon
100%
Carbon credits can

Up to
be used to
compensated compensate for CO2e
LNG emissions lifecycle emissions of
compensated LNG cargoes

BioLNG Feedstock
100%

Up to
Anaerobic
digester
Liquefaction Depending upon
percentage of bio
Manure Food and Agricultural
emissions blending
and slurry amenity waste waste Biogas Biogas upgraded BioLNG reduced
to biomethane

For example, using

Technologies
and efficiencies
~10% renewable electricity in
liquefaction processes
emissions can help reduce
reduced emissions by 8%

90-95%

Up to
Stored and
Liquefied
H2O CO2
CO2 from exported as liquefied When produced
Surplus
Direct Air Capture, synthetic gas from renewable
synthetic gas electricity
from
Bio CO2 circular CO2 and,
in the interim, emissions electricity & using
renewable
(LSG) energy point source
industrial CO2
CH4
reduced bio-CO2
Renewable energy Electrolysis Methanation

Carbon capture
and storage ~80%+ CO2 emissions
removal with CCS
CO2 removal in LNG liquefaction
(CCS)

Source: Shell interpretation of UK Department for Environment, Food and Rural Affairs (DEFRA) GHG conversation factors 2022, JEC Well-to-Tank report v5, Wood Mackenzie announcement

Shell plc February 2024 13

A common goal: reducing methane emissions to ‘near zero’

Driven by government, institutions Driven by industry Driven by customers

and policy

156 countries now part

of Global Methane Pledge, covering Over

86% of LNG importing countries*
80%
Agreement of EU, Japan, of LNG flows covered by more than
South Korea, USA and Australia
to harmonised MRV 120 companies and
70 countries First GIIGNL’s MRV and GHG
have joined OGMP 2.0 Neutral aligned cargo delivered in Taiwan
Groundbreaking methane
Lab tests of new shipping technology
regulation for oil and gas, shows methane reduced to
including imports of gas and
low levels**
LNG into the EU

Reduction

CH4

$255 mln mobilised

for World Bank methane and flaring
fund
52 signatories Increasing customer
led demand for transparency
Source: Oil & Gas Methane Partnership (OGMP), public announcements, Methane Intelligence (MiQ) announcements, to oil and gas decarbonisation and third-party verification
*including EU; **Announcement by Daphne Technologies (SlipPure )
charter launched at COP 28
Shell plc February 2024 14
Gas prices more stable in 2023

2
but volatility lingered in tight
market

Shell plc
Despite structural tightness prices moderated in 2023
JKM prices fell but remained above historical norms

Global gas trade change (2019 vs 2023) Average monthly JKM prices
BCM
2023 demand factors $/MMBtu

100 60
Mild winter temperatures

50
High gas & LNG inventories in
40
Europe & Asia
0

Strong nuclear generation in

France, Japan & South Korea 20
-50

Modest Chinese economic

-100 recovery 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Weak European demand
-150
& energy savings
Pipeline exports* LNG exports
2016-2020 range 2021 2022 2023

Source: Shell interpretation of Intercontinental Exchange (ICE) and Wood Mackenzie data
JKM: Japan Korea Marker
*Pipeline exports exclude North America pipeline trade

Shell plc February 2024 16

Supply security concerns sparked periods of volatility
Global events impacted market even with record-high inventories

European gas inventories Dutch TTF traded volume vs price

% full Event-driven MW EUR/MWh
1 2 3
volatility 1
100% 600.000 80
2
Prolonged 3 70
1 500.000
80% Norwegian
maintenance 60
400.000
50
60%

Australian 300.000 40
2
40%
industrial action
concern 30
200.000
20
20%
100.000
3 Israel-Hamas 10
conflict
0% 0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sep-23
Jan-23

Apr-23
Feb-23
Mar-23

May-23

Aug-23
Jun-23

Oct-23
Nov-23
Dec-23
Jul-23
2018-2022 range 2022 2023 Max capacity
Traded volume Front month price

Source: Shell interpretation of Commodity Essentials and ICE data

Europe includes UK, Germany, Belgium, France, Denmark, Netherlands, Spain, Italy, Austria, Slovakia, Czech Republic and Switzerland
TTF: Title Transfer Facility

Shell plc February 2024 17

USA became the largest LNG exporter
Panama Canal constraints shifted trade patterns

Top exporters in 2023 US exports to Asia

MT MT

100 4

80
3

60

40

1
20

0 0
USA Australia Qatar Russia Malaysia

Sep-23
Jan-23

Apr-23
Mar-23

May-23

Aug-23
Feb-23

Oct-23
Jun-23

Jul-23

Nov-23

Dec-23
USA Australia Qatar Russia Malaysia Panama Canal Suez Canal Others*

Source: Shell interpretation of Kpler data

*Others: Cape of Good Hope

Shell plc February 2024 18

New infrastructure helps redistribute European LNG imports
China retook top importer spot, emerging Asia shows growth potential

Change in LNG imports 2023 (YoY) Total LNG trade: 404 MT

MT

10 7.9

4.6 4.1
5 2.9
2.0 1.7 1.3 1.1 0.8 0.7 0.7 0.6 0.4 0.4 0.4
0
-0.5 -0.6 -0.6 -0.7 -1.1 -1.7
-5 -2.8
-3.5
-4.3
-6.0
-10

Malaysia
Colombia

France
Puerto Rico
Germany

India

Italy

Belgium

Greece

Brazil
Portugal

Japan
Thailand

Singapore

Finland

Hong Kong

Turkey

Spain
Bangladesh

Jamaica
Netherlands

United Kingdom
Philippines

South Korea
Mainland China

European country with existing regasification facility European country with new regasification facility Others

Source: Shell interpretation of Kpler data

Shell plc February 2024 19

European gas demand fell in 2023
Demand destruction continued due to lower supplies and elevated prices

Change in European gas balance Gas-power demand in Europe Industrial gas demand in Europe
BCM BCM BCM

350 10 10
340
8 8
330

320 6 6

310
4 4
300
2 2
290

2800 0 0
Exports

2023
2022

R&C

2022
Production
LNG

Russian piped
Net storage change

Industrial

Power
Other piped

Jul

Dec
Apr

Jun
Mar

Sep
May

Aug
Jan

Oct

Nov
Jul

Dec

Feb
Apr

Jun
Mar

Sep
May

Aug
Jan

Oct
Feb

Nov
Gas demand
Change in gas demand
Change in storage 2018-2022 range 2023 2018-2022 range 2023

Source: Shell interpretation of Commodity Essentials data

European demand includes UK, Germany, Belgium, France, Denmark, Netherlands, Spain, Italy, Austria, Slovakia, Czech Republic and Switzerland
R&C: Residential and commercial

Shell plc February 2024 20

China gas demand outpaced moderate economic growth
Robust domestic supply, piped imports and term LNG limited spot buying

Change in China gas balance China term vs spot LNG imports

BCM MT

400 100

80
380

60
360
40
8% gas demand growth
340
20

3200 0
2019 2020 2021 2022 2023
2022

2022
2023

R&C
Power

Transport
production

LNG
Piped imports

Industrial
Domestic

Gas demand Change in gas demand Term Implied spot Total LNG imports

Source: Shell interpretation of National Bureau of Statistics of China and Wood Mackenzie data

Shell plc February 2024 21

Japan gas demand declines as more nuclear plants restart
Heatwaves drove up imports briefly

Nuclear availability vs LNG imports Gas-fired power demand vs LNG imports

TWh MT MT
Fukushima accident
120 100 6
Heatwaves
100 5
80
Peak LNG demand
80 4
60
60 3
40
40 2
20 Inventory replenishment
20 1

0 0 0
2011 2013 2015 2017 2019 2021 2023
-1

-2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Nuclear generation LNG imports YoY change in LNG imports Power 2022 Power 2023

Source: Shell interpretation of Japan Ministry of Economy, Trade and Industry (METI), Wood Mackenzie, Energy Aspects data

Shell plc February 2024 22

US supply and Asian demand to lead growth in 2024
Import infrastructure ready to meet potential demand upsides

Forecast LNG supply growth 2024 Forecast LNG demand growth 2024 Global regas capacity growth
MTPA MTPA MTPA
25 25 120

80
15 15
7-20Mt Total 7-20Mt Total

40

5 5

0
2020 2021 2022 2023 2024
-5 -5

Consultant forecast range*

High
Low
-15 -15
Americas Africa Russia Asia Middle Total Asia excl. China Europe Rest of Total
Asia excl. China China Europe Rest of world
East China world

Source: Shell interpretation of Wood Mackenzie, Poten & Partners, S&P Global Commodity Insights and FGE data
All forecasts are normalised to delivered volumes
*Consultant forecast range represents the distribution of year-over-year supply and demand growth forecasts from Wood Mackenzie, Poten & Partners, S&P Global Commodity Insights and FGE

Shell plc February 2024 23

Rising global demand for LNG
expected to keep pace with
new supply 3
Significant LNG supply coming but start-up timings uncertain

Historical global LNG supply growth Global LNG supply growth forecast range
MTPA MTPA

60 60
Consultant forecast range*
High

Low
40 40

20 20

0 0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Source: Shell interpretation of Wood Mackenzie, Poten & Partners, S&P Global Commodity Insights and FGE data
*Consultant forecast range represents the distribution of year-over-year supply growth forecasts from Wood Mackenzie, Poten & Partners, S&P Global Commodity Insights and FGE.

Shell plc February 2024 25

LNG industry has managed large expansions before
Diverse demand sectors poised to consume new LNG supply

Three-year historical and forecast global LNG supply increases

MTPA – % increase Latent demand for LNG

2009-2011 2017-2019 2025-2027*

80 35% 80 35% 80 35%

30% 30% 30%

New
60 60
markets
25% 60
25% 25%

Forecast
20% 20% 20%
40 40 40
15% 15% 15%

10% 10% 10%

20 20 20
5% 5% 5%

0 0% 0 0% 0 0%
Price Fuel
Shipping
sensitive switching
Qatar mega-train Australia & USA Qatar & USA demand
build out first wave second wave buyers

Source: Shell interpretation of Wood Mackenzie, Poten & Partners, IEA, S&P Global Commodity Insights and FGE data
*2025-2027 represents the straight average of consultant forecast growth from 2025 to 2027.

Shell plc February 2024 26

New LNG liquefaction investment underpinned by demand
growth in China, South Asia and Southeast Asia

Global LNG supply vs demand Global LNG supply vs demand Global LNG demand
forecast range scenarios MTPA
MTPA MTPA
800 800 800

600 600 600

400 400 400

200 200 200

0 0 0
2020 2025 2030 2035 2040 2020 2025 2030 2035 2040 2020 2025 2030 2035 2040

LNG supply in operation Security-driven

LNG supply under construction
China
LNG supply in operation Demand forecast range
LNG supply under construction WM - NZE Emerging growth
Demand forecast range IEA - APS Marine
IEA - NZE
Source: Shell interpretation of Wood Mackenzie, Poten & Partners, IEA, S&P Global Commodity Insights and FGE data
WM - NZE: Wood Mackenzie Net Zero Scenario. IEA - APS: IEA Accelerated Pledges Scenario. IEA - NZE: IEA Net Zero Emissions Scenario
Security-driven: Japan, South Korea and Europe. Emerging growth: South Asia, South-east Asia and other demand

Shell plc February 2024 27

Europe will still need LNG despite declining gas demand
Increased term contracting in 2022–2023 is not enough

Europe LNG SPAs Europe gas balance

MTPA BCM

25 600
~70 MTPAe
500
~50 MTPAe
20

400
15
300
10
200

5
100

0 0
2021 2022 2023 2020 2025 2030
Domestic gas production Russian pipeline imports Other pipeline imports
Firm LNG supply Flexible LNG supply Implied spot LNG
Firm LNG supply Flexible LNG supply
Gas demand - Net Zero Scenario

Source: Shell interpretation of Wood Mackenzie data

LNG contracts include LNG SPAs and secondary contracts. Europe comprises EU, UK, Norway, Turkey and Ukraine. Flexible LNG supply: supply that can be diverted. Firm LNG supply: supply contracted for delivery to the buyer.
Gas demand – Net Zero Scenario is Wood Mackenzie’s net-zero forecast, which represents the European Commission’s Fit for 55 decarbonisation policy.

Shell plc February 2024 28

China’s gas infrastructure development accelerates
Growth in scale and connectivity enables China to balance the LNG market

China gas-power capacity growth China regas capacity growth China storage capacity growth
GW MTPA BCM

Total UK Total India

35 60 12 Total Japan
gas power regas capacity
LNG storage
capacity 2023
capacity 2023
30 2023 50 10

25
40 8
20
30 6
15
20 4
10

5 10 2

0 0 0
2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025

Underground gas storage LNG tank storage

Source: Shell interpretation of Wood Mackenzie, UK Department for Energy Security and Net Zero and Gastank data
Capacity growth considers projects that are operational and under construction.

Shell plc February 2024 29

China‘s long-term gas and LNG demand outlook is strong
Supply diversification is a key characteristic of China’s growth

China gas demand by sector China gas supply by source Russian, US term supply to China
BCM BCM Share of total supply BCM Share of total supply

800 800 50% 200 15%

45%

40%
600 600 150
35%
10%
30%

400 400 25% 100

20%
5%
15%
200 200 50
10%

5%

0 0 0% 0 0%
2020 2025 2030 2035 2040 2020 2025 2030 2035 2040 2020 2025 2030 2035 2040

US term LNG Russian term LNG

Domestic production Pipeline imports Russian pipeline gas Russian pipeline + term LNG
Industrial R&C Power Transport LNG imports Import reliance US term LNG

Source: Shell interpretation of Wood Mackenzie data

Shell plc February 2024 30

South, South-east Asia emerging as major LNG import regions
Vietnam, Philippines started importing LNG to backfill domestic gas declines

Total power generation Domestic gas production LNG imports Total regas capacity*
TWh MTPAe MTPA MTPA

1500 30 30 80

60
1000 20 20

40

500 10 10
20

0 0 0 0
2020 2025 2030 2035 2040 2020 2025 2030 2035 2040 2020 2025 2030 2035 2040 2020 2025 2030 2035 2040

Vietnam Vietnam Thailand Vietnam Thailand

Thailand
Philippines Bangladesh Philippines Bangladesh Philippines Bangladesh LNG Imports Regas capacity*

Source: Shell interpretation of Wood Mackenzie data

MTPAe: billion cubic metre equivalent in million tonnes per annum of LNG
*Total regas capacity includes projects that are operational and under construction for the four countries referenced (Vietnam, Thailand, Philippines & Bangladesh).

Shell plc February 2024 31

Global gas market increasingly exposed to US risks

Global liquefaction North American LNG Major North American gas basins
investment* supply 2030 Proven reserves** (Tcf)
MTPA North American
MTPA capacity
LNG supply as % of:

75 250
200+ 100+ 25+
200
Global gas demand
50
150
~5%
Montney
100
25 Global LNG demand

~30%
50 Appalachia

0 0 Permian
North American
gas demand
Haynesville
~20%
North America Qatar Rest of world Operational Under construction

Source: Shell interpretation of Wood Mackenzie data

*Global liquefaction investment considers projects that have taken a Final Investment Decision (FID)
**Proven reserves: represent 2P commercial reserves as defined by Wood Mackenzie. Bubbles are not exact geographical representations of the shale basins. Appalachia includes Marcellus and Utica plays

Shell plc February 2024 32

Qatar and USA deals dominate long-term contracting
Brent and Henry Hub indexation underscores three commercial structures

Global LNG market trade Long-term LNG SPA signings

% total MTPA Three independent
commercial structures
By seller By indexation
100% 75 75

75% HH PRICE INDEXED LNG

50 50

50%

25 25 OIL PRICE INDEXED LNG

25%

0% 0 0
2015 2017 2019 2021 2023 2021 2022 2023 2021 2022 2023
SPOT PRICE LNG
Signing year Signing year
N. America Qatar
Term Spot Portfolio Others Brent Henry Hub Others

Source: Shell interpretation of Wood Mackenzie and S&P Global Commodity Insights data
SPA: Sales and purchase agreement
N. America represents USA, Canada and Mexico

Shell plc February 2024 33

Buyers pursue long-term supply for energy security
Three-year upswing in contracting shows industry’s commitment to LNG
Long-term LNG SPA Long-term LNG SPA signings Long-term LNG SPAs in
signing history MTPA effect
MTPA MTPA
By buyer By tenor
75 75 75 250

200

50 50 50
150

100
25 25 25

50

0 0 0 0
2020

2021

2022

2023
2016

2018
2017

2019

2021 2022 2023 2021 2022 2023 2040 2045 2050

Signing year Signing year
Signing year
China Europe Portfolio Others 5-10 years 11-20 years >20 years

Source: Shell interpretation of Wood Mackenzie and S&P Global Commodity Insights data

Shell plc February 2024 34

 Latent LNG demand to keep pace
Industry, heating and emerging Gas prices more stable in 2023
with new supply but dependent
Asia to drive LNG demand growth but volatility lingered in tight market
on regas infrastructure investment

2040 Gas and LNG prices

stabilised during 2023 China’s gas demand North America expected to meet
2024 expected to rise by ~30% of total global LNG
But limited new LNG supply has more than 50% by 2040 demand. But reliance on four basins
kept gas prices above historic

+50%
could create midstream constraints
averages

Demand for natural gas has

already peaked in some But demand for LNG is set to ~30%
regions continue growing beyond 2040

86m tonnes
2020 2025 2030 2035 2040

USA became largest LNG

exporter in 2023, shipping
China to drive demand 86 million tonnes 2022 2023 (TTF)
for LNG this decade to meet industry
needs and decarbonisation goals

LNG continues to Chinese gas

lower emissions demand grew 8% despite Europe will continue to
modest economic recovery need LNG to meet gas supply
in the marine sector needs despite consensus for
Overtakes Japan to become falling gas demand
largest LNG importer again

Global LNG supply expansion

Continuing policy support for coming this decade but
LNG-fuelled vessels in natural gas projects in Asia European gas use fell due to startup timings uncertain
operation set to double over the that deliver environmental and continued elevated prices
coming years economic benefits 404
MT
2023
Gas provides flexibility to
balance intermittent solar and +7
wind generation MT
2022
Declining Declining domestic gas
and growing power markets Growing
24/7 Global trade in LNG reached
set to drive South and South-east
Asia LNG imports
power output LNG continued to play a vital 404 million tonnes in 2023, an
energy security role with increase of 7 million tonnes Dependent on investment
Europe importing more than 120 compared to 2022 in regasification infrastructure
million tonnes
Endslide with image of Shell pecten