Shell’s latest liquefied natural gas (LNG) report fails to address fundamental weaknesses in the oil major’s growth strategy, according to activist shareholder group Australasian Centre for Corporate Responsibility (ACCR).
The LNG Portfolio – Strategic Spotlight, published today by Shell, responds to a shareholder resolution backed by more than a fifth of the company’s investors last year.
The resolution was filed by Brunel Pension Partnership, Greater Manchester Pension Fund and Merseyside Pension Fund, which together manage $86bn (€74bn) in assets. The investors asked Shell to justify its LNG demand assumptions and clarify how its expansion plans align with its climate commitments.
In the report, Shell projects global LNG demand to grow by 45–85% by 2050, arguing the fuel will remain a key component of the energy transition, particularly for industrial users and markets shifting away from coal.
The company also stress-tests its portfolio against scenarios developed by the International Energy Agency (IEA), including the Net Zero pathway, and highlights progress in reducing operational and methane emissions.
However, last year’s resolution by the Local Government Pension Scheme (LGPS) investors stated that Shell “appears to have misinterpreted independent analysis in substantiating its demand projections”.
Nick Mazan, oil and gas strategy lead at the ACCR, which co-filed the resolution with ShareAction, said the report does not sufficiently examine whether projected industrial demand will materialise, focusing instead on more marginal sectors.
“While Shell has produced a more sophisticated document than its previous LNG Outlooks and also made some important concessions, including that LNG utilisation may fall during periods of low price, it continues with fundamental flaws that we’ve seen in Shell’s previous LNG disclosures,” said Mazan.
“It does not explain how LNG will outcompete other sources of energy, like renewables, which are cheaper and faster growing. For example, outcompeting renewables for electricity would require gas to be priced below $5/MMBtu, but all of Shell’s new projects cost more than that,” he said.
Vaishnavi Ravishankar, head of stewardship at Brunel, said: “Shell’s expanded LNG disclosures show the momentum behind the 2025 resolution – proof that value-focused, sustained engagement delivers results even in tough stewardship conditions.”
2050 net-zero plan unclear
Mazan also raised concerns about the document’s financial resilience analysis. While Shell is investing in infrastructure designed to produce LNG for decades, it only discloses contracting information to 2029.
“Its most aggressive low-cost sensitivity still only applies to low costs from 2036, leaving a gap from 2030 to 2035 where Shell says little about the resilience of its portfolio,” he added.
Shell’s report acknowledges that after 2030 a greater share of its sales portfolio will be uncontracted, while its stress-testing applies accelerated transition pricing from 2035 at the earliest, leaving the 2030–2035 period largely unexamined.
“Shell continues to see LNG as its largest contribution to the energy transition. However, given the relative emissions of LNG, it remains unclear how this is compatible with its 2050 net-zero ambition,” Mazan added.
