Shell to Exit Australia's North West Shelf Project in $1.45B Deal with XRG

Shell has agreed to sell its 16.67% non-operated interest in Australia's North West Shelf (NWS) LNG project to subsidiaries of XRG for a base consideration of $1.45 billion.

The deal covers Shell's interest in the North West Shelf project in Western Australia, including associated upstream interests, pipeline and midstream infrastructure, as well as interests in related petroleum and pipeline titles, project agreements and offtake arrangements.

North West Shelf is an integrated LNG and domestic gas development with liquefaction capacity of 14.3 million tonnes per annum and approximately 4.4 trillion cubic feet equivalent of remaining resources, according to XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC).

The acquisition would mark XRG's first investment in Australian LNG, providing access to existing LNG infrastructure and equity gas supply for customers in the Asia-Pacific region.

"The North West Shelf combines immediate production, strategic infrastructure, and future upstream development opportunities, making it a strong fit with our long-term ambitions," said Mohamed Al Aryani, President of XRG International Gas.

The transaction, signed through Shell Australia and wholly owned subsidiaries of XRG, is subject to customary adjustments and an additional milestone-linked contingent payment. It has an effective date of January 1, 2026, and is expected to close in 2027, subject to regulatory approvals and other conditions.

The agreement also provides for the buyers to assume decommissioning obligations and provide security in relation to those responsibilities.

North West Shelf comprises several interconnected joint ventures involving Woodside, Chevron, BP, Shell, MIMI and CNOOC.

The project is transitioning towards a business model combining production from existing resources with third-party gas processing, as declining output from its original fields creates available capacity at the Karratha Gas Plant.

"This agreement reflects our commitment to disciplined capital allocation and portfolio choices.

"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,” said Cederic Cremers, Shell's Integrated Gas President.

Shell will retain a presence in Australia's gas sector through its operated QGC and Prelude FLNG projects, the Crux development and its joint venture interests in Arrow Energy and Gorgon.

XRG said it intends to support continued investment in North West Shelf to sustain domestic gas supply and serve demand across the Asia-Pacific region.