Investors at Shell's AGM voice worries about the company's emphasis on LNG expansion
Shell, the multinational oil and gas company, has made a significant stride in its energy transition strategy with the recent commencement of operations at its LNG Canada facility in Kitimat, British Columbia [1][2][3]. The facility, one of North America's largest LNG export projects, initially produces 14 million tonnes per annum (MTPA) of LNG, with potential for a Phase 2 expansion to double capacity to 28 MTPA.
The company sees LNG as a crucial stepping stone towards a lower-carbon future, particularly for Asian markets transitioning from coal-fired power generation. Shell anticipates LNG supply to be its primary contribution to the energy transition over the next decade, with global LNG demand projected to increase by approximately 60% by 2040, driven primarily by economic growth in Asia [1][5].
However, shareholder concerns about long-term strategy and climate commitments have been raised. A resolution put forward by UK LGPS investors questions Shell's assumptions, warning that the company has more uncontracted LNG than any other oil and gas major, leaving it highly exposed to losses if prices were to drop [9]. More than 20% of Shell's shareholders have backed this resolution [10].
Doug McMurdo, chair of the Local Authority Pension Fund Forum, has questioned whether the board concurs that LNG is a low-carbon fuel [7]. Investors such as Vaishnavi Ravishankar, head of Stewardship at Brunel Pension Partnership, have expressed concern about the disconnect between Shell's LNG expansion and its Paris-alignment ambition [8].
In response, Shell emphasises LNG's role as a transition fuel that can support intermittent renewable energy sources and help reduce overall emissions by replacing coal [1]. The project also demonstrates strong local economic benefits, partnering with Indigenous communities and awarding significant contracts to regional businesses [1].
Shell has announced ambitions to grow LNG sales by 4-5% annually through 2030, reinforcing its leadership in this sector [1]. The company's CEO, Wael Sawan, expressed his conviction in supporting the growth of LNG and decarbonizing it over time through carbon capture and sequestration, and the development of liquid synthetic gas [4].
Under UK listing rules, companies receiving over 20% opposition are required to explain how they will address shareholder concerns [6]. As the energy sector continues to evolve, Shell's approach to LNG expansion attempts to balance growth with climate considerations and long-term energy transition planning [1][2][5].
The debate surrounding LNG as a transition fuel is set to continue, with the NZI Annual Conference scheduled for 21.10.2025 at the London Stock Exchange [3]. The conference promises to be a platform for further discussion on Shell's LNG strategy, its climate commitments, and the future of the energy sector.
[1] https://www.shell.com/energy-and-innovation/projects-and-infrastructure/lng-canada.html [2] https://www.shell.com/energy-and-innovation/projects-and-infrastructure/lng-canada-expansion.html [3] https://www.nzi.coop/events/nzi-annual-conference-2025 [4] https://www.shell.com/media/news-and-insights/content/shell-ceo-wael-sawan-speaks-lng-canada-kitimat.html [5] https://www.shell.com/energy-and-innovation/projects-and-infrastructure/lng-canada-expansion-faqs.html [6] https://www.lse.co.uk/markets/companies/uk-listing-rules/takeovers-and-mergers/20-shareholder-opposition [7] https://www.localpensionsforum.org/ [8] https://www.brunelgroup.co.uk/ [9] https://www.accr.net/ [10] https://www.milieudefensie.nl/en/shell/
Shell plans to grow its LNG sales by 4-5% annually through 2030, with the company's CEO, Wael Sawan, emphasizing LNG's role as a transition fuel that can support renewable energy sources and decarbonize over time. However, shareholder concerns about long-term strategy and climate commitments remain, with more than 20% of Shell's shareholders backing a resolution questioning the company's assumptions about LNG supply and its Paris-alignment ambition.
