* Profit falls 25% to $3.6 billion
* Drop due to weaker LNG prices and refining
* Weaker global economic backdrop also impacted
* Cash flow rises 16% to $11 billion(Adds details throughout, recasts, adds graphics, updatesShell)
By Ron Bousso
LONDON, Aug 1 (Reuters) - Royal Dutch Shell'ssecond-quarter profit slumped to a 30-month low on weaker gasprices and refining margins, denting a steady recovery in recentyears and sending the Anglo-Dutch energy company's shares down5%.
The results missed analyst forecasts by a wide margin andtriggered the biggest one-day retreat in Shell shares in overthree years. The company was the second-worst performer onLondon's FTSE 100 index in morning trade.
Shell, the world's No.2. traded energy company, joins rivalsTotal and Norway's Equinor in reporting weakresults for the quarter while BP reported stronger-than-expectedprofit.
Shell's performance fell short of expectations across theboard but was most pronounced at its flagship liquefied naturalgas unit. The company also blamed a weaker global economic andtrade environment for hurting its chemicals business.
"The general macro (environment) at this point in time ofcourse is not supportive in a number of areas," CEO Ben vanBeurden told reporters.
Trade tensions between the United States and China arehaving "quite a dramatic reaction" on the petrochemical sectoras demand for plastics in the world's two largest economiessags, he added.
A rise in cash generation - a sign of improving operations -was the one bright spot in the company's results.
VOLATILE EARNINGS
Net income attributable to shareholders in the quarter,based on current cost of supplies (CCS) and excluding identifieditems, dropped 25% to $3.6 billion from a year ago - the lowestsince the end of 2016.
That was about 30% below the average estimate from analysts.
Shell's debt debt pile rose to $66.5 billion by mid-yearfrom $64.7 billion at the end of 2018, underscoring the strainfrom its dividend programme - the world's largest at over $15billion - and $25 billion share buyback programme.
"This set of earnings is weaker than most were looking forand were below expectations in all the main divisions," MorganStanley analyst Martijn Rats told Reuters.
"Earnings remain hard to forecast and volatile."
WEAK LNG
Shell's LNG division, known as Integrated Gas, struggled themost - hurt by $479 million in impairment charges in Trinidadand Tobago and Australia as well as lower sales and weakerprices.
Asian LNG spot prices have more than halved since the startof the year, weighed down by soaring new production.
But Chief Financial Officer Jessica Uhl said Shell, theworld's top LNG trader, continues to forecast a strong long-termoutlook for the market as demand picks up.
Oil and gas production in the quarter rose 4% from a yearearlier to 3.58 million barrels of oil equivalent per day, butwas down from 3.442 million boed in the first quarter of 2019.
Cash flow, a key measure for the Anglo-Dutch company, roseto $11 billion from $9.5 billion a year ago.
Free cash flow - cash available to pay for dividends andshare buybacks - dropped to $6.9 bilion.
Shell has focused on cash generation as a key measure ofgrowth, targeting free cash flow of $25 to $30 billion a yearbetween 2019 and 2021 and as much as $35 billion by2025.
Exxon Mobil and Chevron both report onFriday.
(Additional reporting by Sabina Zawadzki, editing by DeepaBabington)
