Current RDS.A Stock Info

Royal Dutch Shell plc (ticker: RDS.A) and Kuwait Petroleum Corp. have signed an LNG contract that secures Kuwait’s domestic energy needs for the next 15 years.

A private source told Bloomberg that the contract will cover 2-3 million metric tons of LNG a year, all while undercutting Brent benchmark prices by 11%.

“The big issue for Kuwait is they burn a lot of oil, most of their power generated is from oil, and so importing LNG for them is cheaper and frees up oil for export,” Robin Mills, chief executive officer of Dubai-based Qamar Energy, said by phone to Bloomberg.

ACCESSWIRE gave some background information, noting that Shell has been supplying Kuwait Petroleum with LNG imports since 2010. Hot temperatures and the need to power air conditioners has fuel for electrical generation, including natural gas, in high demand in Kuwait.

Kuwait’s government plans 1 Bcf/d production by fiscal year 2023. Three early production units, the last to be commissioned in January 2018, will increase natural gas production to about 500 MMcf/d. The country is looking at its northern Jurassic gas fields to exploit. The country imported 3.49 million metric tons of LNG in 2016, according to the International Group of Liquefied Natural Gas Importers.

Kuwait and the United Arab Emirates are the sole importers of LNG in the area, but Bahrain will start in 2019, a recent Bloomberg article reported.

India and China have also recently signed decade-long LNG contracts with the goal of reducing reliance on coal, a major source of pollution in both countries.

Shell estimates $0.5 billion bump from tax cuts

“Royal Dutch Shell plc expects the potential economic impact of the recently enacted US tax reform legislation to be favorable to Shell and to its US operations,” the company said, “primarily due to the future reduction in the US corporate income tax rate from 35% to 21%.”

Using Q3 2017’s financial statements, the company would have incurred an estimated charge to earnings of $2.0 billion, to $2.5 billion, primarily driven by a re-measurement of its deferred tax position to reflect the lower corporate income tax rate.

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