IEEJ：March 2021 © IEEJ2021

Royal Dutch Shell

IEEJ：March 2021 © IEEJ2021

Cautionary note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In thisfluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g)presentation “Shell”, “Shell Group” and “Royal Dutch Shell” are sometimes used for convenience where references are madeenvironmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties andto Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer totargets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries

Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no usefuland countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory

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impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is

as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held

provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements

by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to inThis presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of

this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other thanfuture results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2019 (available atstatements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements arewww.shell.com/investors and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained

statements of future expectations that are based on management’s current expectations and assumptions and involve known

in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of thisand unknown risks and uncertainties that could cause actual results, performance or events to differ materially from thosepresentation, March 25, 2021. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly

expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the

update or revise any forward-looking statement as a result of new information, future events or other information. In light ofpotential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs,

these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained

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disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov

results to differ materially from those expressed in the forward-looking statements included in this presentation, including(without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency

Royal Dutch Shell

IEEJ：March 2021 © IEEJ2021

01

02

03

Gas and LNG have a key role toplay in a decarbonising world

LNG shows its resilience andflexibility in 2020

Complementary spot and term
contract structures and cleaner
pathways to drive LNG growth2020 saw new net-zero emissions (NZE)
announcements at both national and regional
levels. Natural gas can help lower overall
emissions, whether in partnership with renewables
to deliver a reliable energy choice or to power
hard-to-electrify sectors. 65% of the growth innatural gas use in the next twenty years is
expected to come from non-power sectors. LNG is
expected to be the fastest growing source of
natural gas.

While COVID-19 derailed expected forecasts,
LNG demand still grew with trade reaching 360
million tonnes in 2020. The industry reacted swiftly
to changing market conditions, diverting cargoes
to shifting demand centres and through adjusting
supply. Prices remained volatile, hitting a record
low before rebounding to record high in early2021. New LNG supply investment decisions
ground to a halt due to the pandemic-driven
economic crisis.

LNG demand is expected to grow steadily with asupply-demand gap estimated to emerge in the
middle of the current decade. With an increasing
number of buyers and suppliers, the industry has
evolved to offer a wider choice of commercial
structures to meet changing needs. Against a
backdrop of increasing NZE targets, the industry willneed to further innovate to offer cleaner energy
supply.

Royal Dutch Shell

IEEJ：March 2021 © IEEJ2021

01

Gas and LNG have a key role to playin a decarbonising world

Royal Dutch Shell

IEEJ：March 2021 © IEEJ2021

Three of the ten highest CO2 emitting countries announce
net-zero emissions (NZE) targets during 2020
South Korea 2030’s energy outlook

NZE announcements globally

24

PM2.5

coal-fired power
plants to switch
to LNG

4%

REDUCTION

-57%

06

10%

coal-fired power
plants to shutdown
29%

POPULATION

2%

3%

300%

2.172 billion

increase in renewablecapacity~25% of global
population1%
Source: Shell interpretation of Global Carbon Atlas, National Policy
announcements, UNFCC, Climate Action Tracker, World Bank, CDP and US
Bureau of Economic Analysis and Ministry of Trade Industry and Energy South
Korea 2019 and 2020 dataGDP

$42,226 billion~50% of global economy
Royal Dutch Shell

<1%

<1%

NZE – Announced 2020

NZE Announced% of global CO2 emissions

PM2.5: Particulate Matter 2.5 micrometres
Europe is EU 27+3, (Norway, Switzerland, UK)IEEJ：March 2021 © IEEJ2021

Gas demand projected to grow and playa key role in decarbonising sectors
Global energy demand growth by fuel type

Global gas demand growth by sector

20,0005,000

BCM16,000

41%

33%

26%

8%

-12%

4%

12,0008,000

Energy demand 1% CAGR

BCM

29%
35%

9%

27%

Global gas demand growth by region
BCM

5,000
48%

4,000

4,000

3,000

3,000

2,000

Gas demand 1% CAGR

2,000

4,000

1,000

1,000

0

0

0

Source: Shell interpretation of Wood Mackenzie H1 2020 data
CAGR - Compound annual growth rate Res & comm: Residential and Commercial

Royal Dutch Shell

20%

-1%

9%

24%

Asia gas demand 3% CAGRIEEJ：March 2021 © IEEJ2021

Gas is a reliable partner to renewable power andprovides flexibility to meet seasonal heating demand
Share of coal, gas & renewables in Spain power sector

UK total electricity & gas demand

80%

140

5.0

70%

120

%

Mt CO2e

60%

100

50%

80

TWh
4.5
4.0
3.5

3.0
2.5

40%
60

30%

40

20%
10%

20

0%

0
2005

2008
Coal

2011
Gas

2014
Solar & wind

2017

2020

Annual emissions (RHS)

2.0
1.5
1.0
0.5
0.0
2015

2016
Gas

Source: Shell interpretation of Wood Mackenzie, IEA, Aurora Energy Research, National Grid, Grid Watch UK 2021 and Sustainable Gas Institute White Paper 5 2020 data

Royal Dutch Shell

2017
Electricity

2017

2018

2019

2020

2020

IEEJ：March 2021 © IEEJ2021

Gas enables reduction of industrial emissions
Iron and steel sector benefitting from coal-to-gas switching
Benefits of using gas in the iron & steel sector

2020 industrial energy use andemissions in India
100%
90%
80%

36%

70%

-36%

-85% -90%

EMISSIONS-100%

EMISSIONS

Coal-to-gas switching
36% CO2 emissions saving
through the use of natural gas,hydrogen and LNG for direct
reduced iron (DRI) steel production

Carbon capture& storage
85-90% CO2 emissions saving

EMISSIONS

Biogas & BECCS
86% CO2 emissions reduction using
electric arc furnace (EAF)*
Potentially negative when using
biogas / bioenergy + CCS

60%
50%
40%
30%

73%

20%
10%
0%

Energy consumption (Mtoe)

Coal
Source: Shell interpretation of IEA ETP, Wood Mackenzie, worldsteel data 2020 data
* If electricity is sourced from renewable generation

Royal Dutch Shell

BECCS: Bioenergy carbon capture & storage

Mtoe: Million tonnes of oil equivalent

MTCO2: Million tonnes CO2

Oil

Gas

Energy emissions (MtCO2)

Electricity

Bioenergy

IEEJ：March 2021 © IEEJ2021

Uptake of gas in the road transport sector
Demand increasing as number of LNG-fuelled vehicles increase
In 2020, China’s road transport
sector consumed nearly

13 million tonnesof LNG
3,000+

LNG stations in China

300+

in 21 countries across Europe

7.9 million tonnesof LNG demand projected for roadtransport in Europe by 2030

LNG-fuelled trucks & buses (China)

LNG-fuelled trucks (Europe)

600,000

15,000# of vehicles

500,000

12,000400,000

9,000

300,000
6,000

200,000

3,000

100,000
040% of which is expected tobe met with bio-LNG

Source: Shell interpretation of NGVA 2020, Less Better, SCI China, CARTAC and other industry 2019 and 2020 data

Royal Dutch Shell# of trucks

0
2016

2017

Trucks

Buses

2018

2019

2020

2016

2017

2018

2019

2020

IEEJ：March 2021 © IEEJ2021

Marine sector LNG demand grows as global
bunkering infrastructure develops rapidly# of ships

MT

450

4.0

400

3.5

350

3.0

300
250
200

50

2017

45
35

2.0

25

2018

2019

15
5

0

0.0

0

2020

In operation

LNG consumption (RHS)

Source: Shell interpretation of DNV GL 2020 data and various news reports

Royal Dutch Shell

Van Oord

3 LNG-powered dredging vessels

2021
On orderMOL

18,600 cubic metre bunkering vessel

10

0.5

Sovcomflot

9 LNG-powered Aframax tankers

20

50

Brittany Ferries

LNG-powered ferry Honfleur

40
30

1.0

100

A choice of LNG enabling accessto green financing

2.5

1.5

150

LNG bunker vessels# of vessels

Millions

LNG fuelled ships & consumption

On orderIn operation

Hapag Lloyd

6 LNG-powered containerships

IEEJ：March 2021 © IEEJ2021

LNG to play a pivotal role in meeting gas demand
growth, particularly in Asia
Global gas supply by source

LNG imports by region

BCM

BCM
39%

5,000
46%

1,000

14%

4,000

Asia LNG demand 4% CAGR800

LNG demand
3.5% CAGR

3,000

600

2,000

400

1,000

200

0

2020

Domestic

Pipeline

LNG

production

imports

imports

2040

0

2020
Asia

Source: Shell interpretation of Wood Mackenzie H1 2020 data

Royal Dutch Shell

CAGR: Compound annual growth rate

2022

2024

Europe2026

2028

Americas

2030

2032

Rest of world

2034

2036

2038

2040

IEEJ：March 2021 © IEEJ2021

02

LNG shows its resilience and flexibility in 2020

Royal Dutch Shell

IEEJ：March 2021 © IEEJ2021

LNG shows resilience and flexibility ina rapidly changing environment$/MMBTU
35

Japan, Korea and othereast Asian countries go
into lockdown◼ Asian cargoes
diverted to Europe
◼

30
25
20
15

Warm
winter innorthernhemisphere◼ Highinventory
levels acrossregions◼

China inlockdown
due toCOVID-19◼ Chinesecargoes
diverted to
Korea and
India◼

Negative
netbacks
prompt US
shut-ins◼

India and rest ofSouth Asia in
lockdown◼ Europe
absorbs more
LNG due tofavourable coalto-gas switchingeconomics◼ Chinese demand
starts to recover

Asian LNG
demandrecovers as
lockdowns ease
◼ Hurricane Laurashuts down
Cameron and
Sabine Pass LNG◼

10Supplydisruption
in otherbasins◼ Europe LNG
imports slow
down

Record price spike as extreme
weather continues◼ Tight shipping market due toincreased Atlantic supply to Asia
◼ Panama Canal delays◼

◼

◼

◼ Winter buying amidst◼

supply disruption
causes global LNG priceto rise further◼

Prices start recovering as
demand grows with continued
supply outage◼ US netbacks favourable
again, US LNG exports pick up◼

Prices go down
as weather
moderates

Record cold
weather in
Asia calls formore LNG

50
Jan-20Feb-20Mar-20JKM (Japan Korea Marker)

Apr-20Dutch TTF

Source: Shell interpretation of ICE, CME, S&P Global Platts 2020 and 2021 data

Royal Dutch Shell

May-20US Henry Hub

Jun-20Jul-20Aug-20

Sep-20

Oct-20Nov-20Dec-20Jan-21

Feb-21IEEJ：March 2021 © IEEJ2021

2020 started with a well-supplied
global gas and LNG market
LNG liquefaction capacity additions

Winter* average temperature

Gas/LNG storage level**

40

12

100%

30

9

MT

Degrees Celsius% utilisation

80%

60%
20

6
40%

10

3

0

0
2015 2016 2017 2018 2019 2020 2021 2022 2023

20%

0%Europe

China

Japan

South

US

Europe

Japan

Korea
10-year range
Source: Shell interpretation of IHS Markit, PIRA, AGSI, METI, KESIS and EIA 2020 data
*Winter months are from October through March. 2020 winter average from October 2019 to March 2020**As of 31st December 2019

Royal Dutch Shell

2020 Average

5-year range

2019

South Korea

USIEEJ：March 2021 © IEEJ2021

LNG demand continued to grow despite a global pandemic
China and India lead demand recovery
GDP, gas & LNG growthin 2020

Net LNG imports: 2020 y-o-y1%82020 share of demand
growth by region

MT

%

%

15%
Total LNG trade: 360 MT

6

0%

10%

4
-1%

2

5%

0

-2%

0%

-2

-3%

-4

-5%

-4%

-10%

-5%

Q1
Real GDP

Gas consumption

LNG import◼ Asia◼ Europe◼ Americas◼ Middle East

Q2

Q3

Q4

Total

China

India

Japan

South Korea

EuropeGlobalSource: Shell interpretation of IHS Markit, customs, Kpler and International Monetary Fund 2020 data
LNG importers with minimal year-on-year change are not included in this chart

Royal Dutch Shell

February 2021

15

IEEJ：March 2021 © IEEJ2021

China gas demand growth remained resilient in 2020
Record Chinese LNG imports in December 2020
China domestic gas production & LNG demand

China gas supply & demand

BCM

BCM

35

35%

30

30%

25

25%

20

20%

15

15%

10

10%

5

5%

0

0%

Domestic production

Pipeline imports

Source: Shell interpretation of IHS Markit and Chinese customs 2020 data
Res & Comm: Residential and commercial Domestic Prod: Domestic Production

Royal Dutch Shell

LNG imports

Share of LNG

330

310

290
8% gas demand growth
270

250

IEEJ：March 2021 © IEEJ2021

Lower-priced LNG results in 11% increase in Indian imports
LNG supplements reduced domestic gas production
India domestic gas production & LNG imports
BCM
76% ShareIndia gas supply & demand
BCM

100%

58

80%

56

60%

54

40%

52

20%

50

0%

48

5
4
3
2
1
0

Domestic production

LNG imports

Share of LNG (RHS)

Sources: Shell interpretation of Petroleum Planning and Analysis Cell (PPAC), Central Electricity Authority (CEA), IHS Markit and Kpler 2020 data

Royal Dutch Shell

IEEJ：March 2021 © IEEJ2021

Flexibility in European gas supply sources helpedwith global LNG balance
Europe gas supply & demand

Europe gas demand growth y-o-y

BCM
550

Others

%

8

5%

6
4

0%
Industry

2
-5%

500
R&C

450

0
-10%

-2

-15%

-4

-20%

-6

Industrial
Source: Shell’s interpretation of ENTSOG, Wood Mackenzie and European TSO 2020 data
LDC – Local distribution company R&C: Residential and commercial

Royal Dutch Shell

BCM

10%
Algeria

RussiaEurope gas & LNG import growth

LDC

Power

Others

Total

Russia pipeline

LNG imports

Algeria pipeline

IEEJ：March 2021 © IEEJ2021

Supply response to changing market conditions
US supply added volume and flexibility
Major LNG exporters

US LNG exports

8

7

MT

MT

Bcf/d

Non-US LNG supply
MT

100

40

8%

90

30

4%

80

20

0%

70

10

-4%

60

0

-8%

6

6

5
4

4

3
2

2

1
0

-

Australia

US

RussiaAfricaQatar

Source: Shell interpretation of Kpler, EIA and Wood Mackenzie 2020 data

Royal Dutch Shell

LNG exports

Dry gas production (RHS)

Oceania

SE Asia

Middle East

Europe & Russia

AfricaSouth America

Y-o-Y growth (RHS)IEEJ：March 2021 © IEEJ2021

Global LNG prices hit a record low before rebounding
to hit a record high in January 2021
Asia spot price

US LNG export margins*

60%

6$/MMBTU

JKM as % of Brent

50%
4
40%
2

30%

2019

20%
0

10%

2020

-2

0%
Jan

Feb

Mar

Apr

Range 2015-2019

May
2019

Jun

Jul
2020

Aug

Sep

Oct

Nov

Dec

2021

Source: Shell interpretation of ICE, CME, S&P Global Platts 2020 and 2021 data
*Excludes liquefaction fee; netback calculated as: JKM and TTF minus regasification and transportation cost minus 115% Henry Hub

Royal Dutch Shell

Jan

Feb

Mar

TTF netback

Apr

May

JKM netback

Jun

Jul

Aug

Sep

Oct

Nov

Dec

IEEJ：March 2021 © IEEJ2021

A combination of structural issues andsingular events caused the price rally

26%

160

24%

40

0

Atlantic supply
Pacific demand net of Pacific supply

80

22%

0

20%

-5
-10
10%

-15
-20

0%

-25

Total gas demand
Share of residential, commercial
and district heating in total demand

Source: Shell interpretation of IHS Markit, Wood Mackenzie and S&P Global Platts 2020 and 2021 data

Royal Dutch Shell

026-Jan240

20%19-Jan100

512-Jan

28%

20

10

5-Jan

320

60

30%

29-Dec30%22-Dec400

15-Dec140

Degrees Celsius

8-Dec

BCMA

80

North Asia temperature

Share of storage in total gas demand

MTPA
120

Gas storage capacity

1-Dec

Regional supply & demand China heating demand

5 year range

2020-2021

IEEJ：March 2021 © IEEJ2021

Asian LNG demand recovery projected to continue in 2021
LNG exports from the US expected to offer flexible supply
LNG supply growth range by country

LNG demand growth range by region

25

25

20

20

15

15

10

10

5

5

0

0

-5

-5

MTPA

Australia

US

Source: Shell interpretation of IHS Markit and Wood Mackenzie 2020 data

Royal Dutch Shell

RussiaMTPA

Rest of world

Asia

EuropeAmericasMiddle East & Africa

IEEJ：March 2021 © IEEJ2021

LNG supply investment halts due topandemic-related economic crisis
Oil & gas industry* capex spend

Investment in liquefaction capacity

160

80

$billion

MTPA

140
Initial2020
budget

120
100

-23%

Adjusted
2020
budget

80

60

40

60
20

40
20

0

0
2015

2016

2017

2018

2019

2020

2010
Project FIDs

Source: Shell interpretation of IHS Markit and Wood Mackenzie 2020 data
*Industry represents estimated capital budgets of ExxonMobil, Shell, Chevron, Total, BP, Equinor and Eni, as calculated by Wood Mackenzie

Royal Dutch Shell

2012
Forecast

2014

2016

2018

2020

IEEJ：March 2021 © IEEJ2021

03

Complementary spot and term contract structures andcleaner pathways to drive LNG growthRoyal Dutch Shell

IEEJ：March 2021 © IEEJ2021

COVID-19 pandemic delays project construction timelines
Lasting impact expected on LNG supply not demand
Global LNG supply forecast

EU LNG import forecast change

800

10

700

5

600

0

MTPA

MTPA

-5

500

-10

400

Construction
delays

FID delays
andcancellations

-15

300

2020

2022

2024

Pre-COVID-19

2026

2028

2030

Post-COVID-19

Source: Shell interpretation of Wood Mackenzie and IHS Markit 2020 data

Royal Dutch Shell

2032

2034

2036

2038

2040

Range offorecastchanges

-20
2020

2021

2022

2023

2024

2025

2026

2027

IEEJ：March 2021 © IEEJ2021

Supply-demand gap estimated to emerge in the
middle of the current decade as demand rebounds
LNG trade volume growth

Emerging LNG supply-demand gap

40

800

30

600

20

400

10

200

MTPA

MTPA

0

0
2015

2016

2017

2018

2019

2020

2021

2022

2023

2015

2020
Demand forecast range

2025

2030

2035
LNG supply in operation

LNG supply under construction (including Qatar Petroleum expansion)
Source: Shell interpretation of IHS Markit, Wood Mackenzie, FGE and Poten & Partners 2020 and 2021 data
Qatar Petroleum LNG expansion announced in February 2021

Royal Dutch Shell

2040

IEEJ：March 2021 © IEEJ2021

Triggers exist for change in the global LNG market
More market participants with increasingly diverse needs
Long-term LNG contract expiries
MTPA
300
250

~110 MTPA

Total LNG contract volumes
by buyer type

LNG importersMT# of regasification capacity holders in Japan,
China, India and South Korea

1200

50

1000

200

800

150

600

100

400

50

200

0

0

40
30
20
10
0
2010

Japan
TaiwanEuropeChina
Southeast Asia
Americas

Source: Shell interpretation of IHS Markit 2020 data

Royal Dutch Shell

South Korea
South Asia

Portfolio

End-user

Japan

2015

China

India

2020

South Korea

IEEJ：March 2021 © IEEJ2021

Current industry structure appears sustainable
No acceleration in the move to commoditisation
Spot LNG deliveries
MT% of total market

120

35%

100

30%

% spotSpot deviation from term

Term contract indexation

150%

100%

% change from term price

25%

80

40

125%
100%

50%

15%

25%

10%

-50%

0

0%

-75%

2017

2018

2019

2020

Balancing the global
LNG market

Price-conscious buyers withlimited term contracts

Dictated by domestic
seasonality

Supplementing base LNG
term contract supply

Shell interpretation of IHS Markit, Wood Mackenzie, ICE, CME and S&P Platts 2020 and 2021 data

Royal Dutch Shell

25%

-25%

5%

2016

50%

0%

20

2015

75%

75%

20%
60

% of total

0%
2010

2012

2014

2016

2018

2020

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Oil

Henry Hub

JKM

HybridEuropean hubs

IEEJ：March 2021 © IEEJ2021

NZE targets will need cleaner and innovative solutions
All levers needed to decarbonise LNG
LNG demand forecast by
net-zero emissions pledge

LNG value chain emissions and mitigation options% of GHG emissions

MTPA
800
700

UPSTREAM

600
Methanemanagement

500
400

PIPELINE

LNG PLANTSHIPPINGREGASIFICATIONCONSUMPTION

CH4Operational
efficiencies

300
200

Electrification

100

Carbon Capture& Storage (CCS)0

CO2

Carbonoffsetting

NZE ambitions or targets

None

Source: Shell interpretation of IHS Markit, Wood Mackenzie and IEA 2020 data

Royal Dutch Shell

Bio-LNGIEEJ：March 2021 © IEEJ2021

Summary

Gas and LNG have a key role to play in a decarbonising world

01
02
03
Royal Dutch Shell◼ Net-zero emissions announcements across the globe◼ Gas and LNG can play a key role in decarbonising hard-to-electrify sectors◼ Nearly half of gas demand growth in the next 20 years expected to come from Asia

LNG shows its resilience and flexibility in 2020
◼ LNG demand continued to grow despite the global pandemic and ensuing economic crisis◼ Global LNG prices hit a record low before rebounding to hit a record high in January 2021
◼ New LNG supply investment decisions ground to a halt

Complementary spot and term contract structures and cleaner
pathways to drive LNG growth◼ Supply-demand gap estimated to emerge in the middle of the current decade◼ Current industry structure supports the changing needs of buyers◼ Net-zero emissions targets will need cleaner and innovative energy solutions

IEEJ：March 2021 © IEEJ2021

Contact: report@tky.ieej.or.jp