Shell Australia signs deal for stake sale in North West Shelf project to ADNOC's XRG

Shell Australia Pty Ltd, a wholly owned subsidiary of Shell PLC, has signed an agreement to sell its 16.67% non-operated interest in the North West Shelf (NWS) project to the wholly owned subsidiaries of XRG P.J.S.C., Shell said in a statement Nov. 3.

XRG's subsidiaries will acquire the interest for a base consideration of $1.45 billion, subject to customary adjustments, plus an additional milestone-linked contingent payment, Shell said.

XRG is ADNOC's international energy investment company.

The transaction has an effective date of Jan. 1, 2026 and is expected to close in 2027, subject to several conditions precedent, including regulatory approvals, Shell said.

"This agreement reflects our commitment to disciplined capital allocation and portfolio choices," Shell's Integrated Gas President Cederic Cremers said in the statement.

"The sale realises value from a mature, non-operated asset and supports Shell's strategy by focusing investment on advantaged integrated gas positions, as NWS transitions in the future towards a third-party toll-processing model," Cremers added.

The NWS project, an LNG and domestic gas development located in Western Australia, comprises various interconnected joint ventures involving Woodside, Chevron, BP, Shell, MIMI and CNOOC, Shell said in the statement.

Declining production from the original NWS fields has created capacity at the project's Karratha Gas Plant, and NWS is moving to a mixed resource-production and third-party toll-processing business, it said.

In 2023, Shell sold its interest in the Browse project, a proposed offshore gas development, whose concept involves piping gas from the Browse Basin to Karratha for processing and export through existing NWS infrastructure, it said in the statement.

However, Shell said that the company maintains a strong presence in Australia, where it operates the Shell QGC project and Prelude FLNG, is developing the Crux project, and is a joint venture partner in Arrow Energy and Gorgon.

Shell also continues to invest in LNG and integrated gas globally and aims to grow LNG sales by 4%-5% per year to 2030, it added.

In a separate statement on Nov. 3, XRG noted that the acquisition, which represents XRG's first investment in Australian LNG, would enable it to establish a strategic position close to demand growth in the Asia-Pacific region.

"This investment advances XRG's strategy to build a leading international gas business serving growing demand across Asia-Pacific," XRG International Gas President Mohamed Al Aryani said in the statement.

"XRG understands the importance of balancing export success with local energy needs," Aryani added. "We believe continued investment in the North West Shelf can help sustain domestic gas supply, support regional energy security, create jobs, and deliver lasting economic benefits for Australia."

Platts, part of S&P Global Energy, assessed December JKM, the benchmark for LNG delivered to Northeast Asia, at $33.911/million British thermal units Nov. 2, down 16.5 cents/MMBtu from the previous assessment.