Shell LNG Outlook 2024

Cautionary note

The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this LNG Outlook “Shell”, “Shell Group”
and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the words“we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used
where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” asused in this LNG Outlook refer to entities over which Shell plc either directly or indirectly has control. Entities and unincorporated arrangements
over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. “Joint ventures” and “joint
operations” are collectively referred to as “joint arrangements”. Entities over which Shell has significant influence but neither control nor joint
control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest
held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

Forward-Looking Statements
This LNG Outlook contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning
the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed
to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current
expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events todiffer materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements
concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts,
projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”,‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, “milestones”, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’,‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that
could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements
included in this Outlook, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s
products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g)environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful
negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to internationalsanctions; (j) legislative, judicial, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic andfinancial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms ofcontracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m)risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak, regional conflicts, such as Russia’s invasion of
Ukraine, and a significant cybersecurity breach; and (n) changes in trading conditions. No assurance is provided that future dividend payments will
match or exceed previous dividend payments. All forward-looking statements contained in this LNG Outlook are expressly qualified in their
entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking
statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2022
(available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forwardlooking statements contained in this Outlook and should be considered by the reader. Each forward-looking statement speaks only as of the dateof this Outlook, February 14, 2024. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forwardlooking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from thosestated, implied or inferred from the forward-looking statements contained in this LNG Outlook.

Shell plc

Shell’s net carbon intensity
Also, in this LNG Outlook we may refer to Shell’s “Net Carbon Intensity”, which includes Shell’s carbon emissions from the production of ourenergy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with theiruse of the energy products we sell. Shell only controls its own emissions. The use of the term Shell’s “Net Carbon Intensity” is for convenience only
and not intended to suggest these emissions are those of Shell plc or its subsidiaries.
Shell’s net-Zero Emissions Target
Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic
environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and Net Carbon
Intensity (NCI) targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target and 2035 NCI
target, as these targets are currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s
operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may notmeet this target.
Shell expects to publish its 2024 Energy Transition Strategy on March 14, 2024, which will include an update on Shell’s energy transition strategy
and set out Shell’s climate targets and ambitions for the future.
Forward Looking Non-GAAP measures
This LNG Outlook may contain certain forward-looking non-GAAP measures such as [cash capital expenditure] and [divestments]. We are unable
to provide a reconciliation of these forward-looking Non-GAAP measures to the most comparable GAAP financial measures because certain
information needed to reconcile those Non-GAAP measures to the most comparable GAAP financial measures is dependent on future events someof which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measureswith the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without
unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measureare calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.
The contents of websites referred to in this report do not form part of the LNG Outlook 2024.
We may have used certain terms, such as resources, in this LNG Outlook that the United States Securities and Exchange Commission (SEC) strictly
prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575,
available on the SEC website www.sec.gov.

February 20242

Summary
Industry, heating andemerging Asia to drive LNG
demand growth

Rising global demand for LNG
expected to keep pace withnew supply

Demand for natural gas has peaked in someregions and globally is set to peak after 2040.

The global LNG market will continue growing
into the 2040s, mostly driven by China’s
industrial decarbonisation and strengthening
demand in other Asian countries.



Gas prices more stable in
2023 but volatility lingeredin a tight market

Shell plc

Global trade in LNG expanded slightly in
2023, with tight supplies constraining growthand prices staying above historic averages.
A milder winter, high gas storage levels,
modest economic recovery in China andlower demand in Europe helped balance theglobal gas market during 2023.

In the medium term, latent demand for LNG –especially in Asia – is set to consume new
supply that is expected to come onto themarket in the second half of the 2020s.
To offset falling domestic gas production inSouth-east Asia, significant infrastructure
investment will be needed to access the LNG
that these countries need for their economic
development.

Industry, heating andemerging Asia to drive
LNG demand growth1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
Russia2040s+

5.000

4.500

4.500

4.000

4.000

3.500

3.500

3.000

3.000

2.500

2.500

2.000

2.000

1.500

1.500

Indonesia

1.000

1.000

2040s+

500

500

0

0

2010s
China 2040s

Nigeria
2040s+

Regions
2010s

India
2040s+

2023

2020s
2030s

Argentina

2040s+

2030s

South Africa
2040s

BCM

5.000

Japan
USA 2030s

BCM

Natural gas supply source

Electricity
Buildings
Other

2040
Industry
Transport

CAGR

3.6%

-0.2%

0.5%

2023

2040

LNG
Pipeline imports
Domestic production

Source: Shell interpretation of Wood Mackenzie data
CAGR: Compound annual growth rate

Shell plc

February 20245

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

700

1.200

600

1.000

BCM

BCM

500

CAGR

800

400

5.1%

600

4.4%

400

Electricity

Industry

Buildings

Transport

Other

Domestic

Pipeline imports

2040

2039

2037

2036

2035

2034

South-east Asia

2033

South Asia

2040

2031

2023

2032

Mainland China

2040

2030

2023

2029

2040

2028

2023

2027

0
2026

0

0.5%

2025

200

2024

100

2023

200

2038

300

LNG

Source: Shell interpretation of Wood Mackenzie data

Shell plc

February 20246

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

China exposure to EU CBAM

Mt CO2/yr.

2022

0.4 $bn
China steel sector

Ways to decarbonise Chinese steel
%

100%
90%
80%
70%

Top 3 European emitters60%

5.3 $bn

50%
40%

Japan

30%
20%
10%

Aviation17.3 $bn

0%International shipping0
GermanyUK

Turkey

500

1,000

1,500
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 withenvironmental and emissions benefits
Asia Infrastructure Investment Bank
energy project funding 2016 - 2023

Energy demand and air quality in Beijing

1.800

25

BCMe

Unhealthy days

$M

200
180

1.600
20

1.400

160
140

1.200

15

1.000

120
100

800

10

600

80
60

400

5

40

200

20

0

0
2016

2017

Electricity infrastructure

2018
Gas

2019

2020

Green financing

2021

2022

2023

Renewable generation

0
2014

2015

Gas demand

2016

2017

2018

Coal demand

2019

2020

2021

2022

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 20248

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
electricity demand

Buildings gas demand
BCM (2022)

GWh/d
3.500
3.000
2.500
2.000
1.500
1.000
500

Gas*

Electricity**

Nov 2023

Jul 2023

Mar 2023

Nov 2022

Jul 2022

Mar 2022

Nov 2021

Jul 2021

Mar 2021

Nov 2020

Jul 2020

Mar 2020

Nov 2019

Jul 2019

Mar 2019

Nov 2018

0UK
Mainland China

33

European Union
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

Capacity GWGeneration share

South Asia
Capacity GWGeneration share

7.000

70%

1.400

70%

6.000

60%

1.200

60%

5.000

50%

1.000

50%

4.000

40%

800

40%

3.000

30%

600

30%

2.000

20%

400

20%

1.000

10%

200

10%

0

0%

0

0%

2022

2030

Coal

Gas

2035
Nuclear2022

2040
Renewables

Hydro

Other

2030

2035
% coal share

2040

South-east Asia
Capacity GWGeneration share

1.000

80%

900

70%

800

60%

700

50%

600
500

40%

400

30%

300

20%

200

10%

100
0

0%
2022

2030

2035

2040

% 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

5.0

500

GWh/h

GWh/d

4.5

400

4.0
3.5

300

3.0

200

2.5
2.0

100

1.5
1.0

0

0.5

-100

0.0
18-Feb

19-FebGas

20-Feb

21-Feb

22-Feb

23-FebWind & Solar

Hydro

Nuclear

Other

23

24

30

01

02

03

Nov Nov Nov Nov Nov Nov Nov Nov

Dec

Dec

Dec

Coal

25

Gas

26

Wind

27

28

Solar

29

Nuclear

Other

Imports

2023

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)(Gross tonnage)

Projected LNG bunkering to 2028(‘000 tonnes)

Pathways to CO2e reduction
Lower-emission fuels

12,000

LNG

10,000

BioLNG

LSG

8,000
6,000
Conventional

Net
Zero

4,000

Hydrogen & derivatives
LNG

2,000

Other

Efficient tech02023

vessels
537 LNG-fuelledon ordervessels
469 LNG-fuelled
in operation

2024

2025

Bulkers
Cruise
PCC, Ro-Ro, Ferries

2026

2027

2028

Containerships
Tankers
OthersLow methane slip engines –air lubrication – hull coatings– digitalisation – shaft power
generation – methane slip
mitigation / elimination

Future tech
Onboard CCS –co-feeding H2
engines – fuel cellfor main engine

Combined with new technologies

Source: Shell interpretation of Clarksons Research, DNVHydrogen & 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
100%

Feedstock

Manureand slurry

Anaerobic
digesterFood andamenity waste

Agricultural
waste

Liquefaction

Biogas upgradedto biomethane

BiogasBioLNG

Carbon captureand storage
(CCS)

100%

Depending upon
percentage of bio
blending

emissions
reducedFor example, using
renewable electricity inliquefaction processes
can help reduce
emissions by 8%~10%

Technologies
and efficiencies

Liquefiedsynthetic gas
(LSG)

Up to

emissionscompensatedemissions
reduced
H2O

CO2Surpluselectricity
fromrenewableenergyRenewable energy

Bio CO2

Electrolysis

Methanation

CO2 from
Direct Air Capture,
circular CO2 and,in the interim,
point source
industrial CO2

Stored andexported as liquefied
synthetic gas
CH4

Up to

BioLNG

Carbon credits canbe used tocompensate for CO2e
lifecycle emissions of
LNG cargoes

Up toCarboncompensated
LNG

90-95%
emissions
reduced~80%+
CO2 removal

When produced
from renewableelectricity & using
bio-CO2

CO2 emissions
removal with CCS
in LNG liquefaction

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 202413

A common goal: reducing methane emissions to ‘near zero’
Driven by government, institutions
and policy

156 countries

Driven by customers

Driven by industry

now partof Global Methane Pledge, covering
86% of LNG importing countries*

Over

Agreement of EU, Japan,

80%of LNG flows covered by more thanSouth Korea, USA and Australia

120 companies andto harmonised MRV

70 countries

have joined OGMP 2.0
Groundbreaking methaneFirst GIIGNL’s MRV and GHG
Neutral aligned cargo delivered in Taiwan

Lab tests of new shipping technology
shows methane reduced toregulation for oil and gas,including imports of gas andlow levels**

LNG into the EU

Reduction$255 mln

CH4
mobilised

for World Bank methane and flaring
fund
Source: Oil & Gas Methane Partnership (OGMP), public announcements, Methane Intelligence (MiQ) announcements,*including EU; **Announcement by Daphne Technologies (SlipPure )Shell plc

52 signatories

to oil and gas decarbonisation
charter launched at COP 28

Increasing customer

led demand for transparency
and third-party verification
February 2024

14

Gas prices more stable in 2023
but volatility lingered in tightmarketShell plc

2

Despite structural tightness prices moderated in 2023
JKM prices fell but remained above historical norms
Global gas trade change (2019 vs 2023)
BCM
100

2023 demand factors
Mild winter temperatures

50

High gas & LNG inventories in
Europe & Asia

0

-50

-100

-150

Pipeline exports*

LNG exports

Average monthly JKM prices$/MMBtu60

40

Strong nuclear generation in
France, Japan & South Korea

20

Modest Chinese economic
recovery0

Weak European demand& energy savings

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

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% full1

2

Event-driven
volatility

3

100%

1

80%

Prolonged
Norwegianmaintenance

60%

2

40%

Australianindustrial action
concernDutch TTF traded volume vs priceMW

EUR/MWh1

600.00080

2
3500.000

70
60

400.00050

300.000

40
30

200.000

20

2023

Oct

Nov

Dec

Max capacity

Traded volumeDec-23Sep

Oct-23

Aug

Nov-232022

Jul

Sep-23Jun

Aug-232018-2022 rangeMay

Jul-23Apr

Jun-23Mar

0
May-23Feb0
Apr-23Jan

10

Mar-230%

100.000

Feb-233Israel-Hamas
conflictJan-2320%

Front month priceSource: 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
2
40
1

20

0

USA

Australia

Qatar

RussiaMalaysia

Panama Canal

Suez Canal

Dec-23

Nov-23Oct-23

Sep-23Aug-23

Jul-23Jun-23

Malaysia

May-23

RussiaApr-23

Qatar

Mar-23Australia

Feb-23USA

Jan-230

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

5

4.1

2.9

2.0

1.7

1.3

1.1

0.8

0.7

0.7

0.6

0

0.4

0.4

0.4
-0.5

-0.6

-0.6

-0.7

-1.1

-5

-1.7

-2.8

-3.5

-4.3

-6.0

European country with existing regasification facility

European country with new regasification facility

Japan

United Kingdom

FranceSpain

South Korea

BrazilPortugal

GreeceTurkeyMalaysia

Hong Kong

Belgium

Jamaica

Philippines

Colombia

Puerto Rico

Bangladesh

FinlandSingapore

Italy

India

Thailand

Netherlands

Germany

Mainland China-10

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 balanceGas-power demand in Europe

Industrial gas demand in Europe

350

10

10

8

8

6

6

4

4

2

2

0

0

Gas demand
Change in gas demand
Change in storage

2018-2022 range

2023

2018-2022 range

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

Dec

BCM

Nov

Oct

Sep

Aug

2022

Power

R&C

Industrial

2023

Net storage change

Russian piped

Other piped

Exports

LNG

Production

2022

2800

Jul

290

Jun

300

May

310

Apr

320

Mar

330

Feb

340

BCM

Jan

BCM

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

100

400

80

380

60
360

40

8% gas demand growth
340

20
0

Gas demand

Change in gas demand

2022

Transport

Industrial

R&C

Power

2023

LNG

Piped imports

production

Domestic

2022

3200

2019

Term

2020

2021

Implied spot

2022

2023

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

MT

TWh

Fukushima accident

120
100

Peak LNG demand

80

6

80

5

40

40

20

20

0

0
2011

2013

2015

2017

2019

2021

2023

MT

100

60

60

Gas-fired power demand vs LNG imports
Heatwaves4
32
Inventory replenishment

1
0
-1
-2
Jan

Nuclear generation

LNG imports

Feb

Mar

Apr

May

YoY change in LNG imports

Jun

Jul

Aug

Power 2022

Sep

Oct

Nov

Dec

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

25

25

120

15

15

MTPA

7-20Mt

Total

MTPA

MTPA

80
7-20Mt

Total
40

5

5
0

-5

2020

-5

2021

2022

2023

2024

Consultant forecast range*
High
-15

Low

-15
Americas

AfricaRussiaAsia

MiddleEast

Total

Asia excl.
China

China

EuropeRest of

Total

world

Asia excl. China

China

EuropeRest of 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 withnew supply3

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
2009-201180

2017-2019
35%

80

30%
60

40

20

25%
20%
15%
10%

0%

Qatar mega-train
build out

2025-2027*
35%

80

30%
60

40

20

60

25%
20%
15%
10%

0

0%

Australia & USA
first wave

35%
30%

40

20

5%

5%
0

Latent demand for LNG% increase

Forecast

MTPA –

25%

New
markets

20%
15%
10%

5%
0

0%

Qatar & USA
second wave

Shipping
demandPricesensitive
buyersFuelswitchingSource: 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
forecast range

Global LNG supply vs demand
scenarios

Global LNG demand

800

800

800

600

600

600

400

400

400

200

200

200

0

0

0

MTPA

2020

2025

2030

2035

LNG supply in operation
LNG supply under construction
Demand forecast range

2040

MTPA

2020

2025

2030

2035

LNG supply in operation
LNG supply under construction
Demand forecast range
WM - NZE
IEA - APSIEA - NZE

2040

MTPA

2020

2025

2030

2035

2040

Security-driven
China

Emerging growth
MarineSource: 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 enoughEurope LNG SPAs

Europe gas balance

MTPA

BCM

25

600

~70 MTPAe~50 MTPAe

500

20

400

15

300
10

200

5

100

0

0
2021

Firm LNG supply

2022

2023

Flexible LNG supply

2020

2025

2030

Domestic gas production

Russian pipeline imports

Other pipeline imports

Firm LNG supply

Flexible LNG supply

Implied spot LNG

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
GW
35
30

Total UKgas power
capacity
2023

China regas capacity growth

China storage capacity growth

MTPA
60

BCM

Total India
regas capacity
2023

12

50

10

40

8

30

6

20

4

5

10

2

0

0

0

25
20
15
10

2020

2021

2022

2023

2024

2025

2020

2021

2022

2023

2024

2025

Total JapanLNG storage
capacity 2023

2020

2021

2022

Underground gas storage

2023

2024

2025

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

BCM
800

BCM

Share of total supply

800

50%

Russian, US term supply to China
BCM

Share of total supply

200

15%

45%

600

40%

600

35%

150
10%

30%

400

400

25%

100

20%
15%

200

200

10%

5%
50

5%

0

0
2020

Industrial

2025

R&C

2030

Power

2035

Transport

2040

0%

2020

2025

2030

2035

2040

Domestic production

Pipeline imports

LNG imports

Import reliance

0

0%
2020

2025

2030

2035

2040

US term LNG

Russian term LNG

Russian pipeline gas

Russian pipeline + term LNG

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

1500

30

30

1000

20

20

TWh

MTPAe

Total regas capacity*

MTPA

MTPA
80
60
40

500

10

0

0
2020

2025

VietnamPhilippines

2030

2035

ThailandBangladesh

2040

10

20
0

0
2020

2025

2030

2035

2040

2020

2025

2030

2035

2040

VietnamThailand

VietnamThailandPhilippines

Bangladesh

Philippines

Bangladesh

2020 2025 2030 2035 2040

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
investment*

North American LNG
supply

75

250

MTPA

MTPA capacity

Montney
Global LNG demand

~30%

50
0

North American
gas demand~20%

North America

Qatar

Rest of world

100+ 25+

~5%

100

0

Proven reserves** (Tcf)

Global gas demand

150

25

North American
LNG supply as % of:

200+

200
50

2030

Major North American gas basins

Operational

Appalachia
PermianHaynesville

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 tradeLong-term LNG SPA signings% totalMTPA

By indexation

By seller
100%

75%

75

75

50

50

25

25

0

0

Three independentcommercial structures

HH PRICE INDEXED LNG

50%

25%

0%
2015

2017

2019

2021

2023

2021

2022

2023

OIL PRICE INDEXED LNG

2021

Term

Spot

Qatar
Others2023

Signing year

Signing year
N. America
Portfolio

2022

Brent

Henry Hub

SPOT PRICE LNG

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
signing history

Long-term LNG SPAs in
effectLong-term LNG SPA signings
MTPA

MTPA
75

MTPA

By tenorBy buyer

75

75

250

200

50

25

50

50

25

25

150

100

50

0

Signing year

0

2023

2022

2021

2020

2019

2018

2017

2016

0
2021

2022

2023

0

2021

Signing year
China

EuropePortfolio

Others5-10 years

2022

2023

2040

2045

2050

Signing year
11-20 years>20 years

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

Shell plc

February 202434

Industry, heating and emerging
Asia to drive LNG demand growth2040

Gas and LNG prices
stabilised during 2023

2024

Demand for natural gas has

already peaked in someregions

Latent LNG demand to keep pacewith new supply but dependent
on regas infrastructure investment

Gas prices more stable in 2023
but volatility lingered in tight market

But limited new LNG supply has
kept gas prices above historic
averages

But demand for LNG is set to

China’s gas demand
expected to rise by
more than 50% by 2040

+50%

North America expected to meet
~30% of total global LNG
demand. But reliance on four basins
could create midstream constraints

continue growing beyond 2040

~30%86m tonnes
2020

China to drive demandfor LNG this decade to meet industry
needs and decarbonisation goals

LNG continues to2023

European gas use fell due tocontinued elevated prices

power output

Global LNG supply expansion
coming this decade but
startup timings uncertain

404
MT
2023

Gas provides flexibility tobalance intermittent solar andwind generation

24/7

2035 2040

Europe will continue toneed LNG to meet gas supply
needs despite consensus forfalling gas demand

Overtakes Japan to becomelargest LNG importer again
Continuing policy support for
natural gas projects in Asia
that deliver environmental andeconomic benefits

2030

(TTF)

8%

in the marine sector

operation set to double over the
coming years

2022

Chinese gas
demand grew
despitemodest economic recovery

lower emissions

LNG-fuelled vessels in

USA became largest LNG
exporter in 2023, shipping
86 million tonnes

2025

+7

MT
2022

LNG continued to play a vitalenergy security role with
Europe importing more than 120
million tonnes

Global trade in LNG reached
404 million tonnes in 2023, an
increase of 7 million tonnes
compared to 2022

Declining

Declining domestic gas

and growing power markets
set to drive South and South-east
Asia LNG imports

Dependent on investment
in regasification infrastructure

Growing

Endslide with image of Shell pecten