XRG, the international investment arm of Abu Dhabi National Oil Co., agreed to buy Shell PLC’s stake in Australia’s North West Shelf liquefied natural gas venture, giving the Gulf state’s energy champion its first foothold in Australian LNG.
Shell said Tuesday it will sell its 16.67% non-operated interest in the Woodside Energy-run project for a base price of $1.45 billion, plus an additional payment linked to unspecified milestones. XRG, which valued the transaction at about $1.5 billion, will also assume all decommissioning obligations tied to the stake. The deal is expected to close in 2027, pending regulatory approvals.
An aging asset with a pipeline of new gas
The North West Shelf is one of Australia’s oldest and largest LNG export complexes, with liquefaction capacity of about 14.3 million metric tons a year and an estimated 4.4 trillion cubic feet equivalent of remaining gas resources. Its owners include Woodside, Chevron, BP, Shell, China’s CNOOC and a Mitsui-Mitsubishi venture.
Output from the project’s legacy fields is falling. Woodside said in its third-quarter report that it plans to shut a second processing train at the facility in 2027 as it turns to more third-party gas. Analysts have suggested XRG may also look at a position in the undeveloped Browse fields, which are slated to eventually feed the plant.
XRG keeps shopping
XRG, set up in late 2024 to build a global gas and chemicals portfolio, now puts its enterprise value at more than $150 billion. It walked away from an $18.7 billion offer for Australian producer Santos last year after the two sides couldn’t agree on terms, and has since taken interests in gas projects in Azerbaijan, Turkmenistan and elsewhere. Its executives framed the North West Shelf purchase as a way to serve Asia-Pacific buyers while supporting Australia’s domestic gas supply.
For Shell, the sale trims a mature non-operated position while it focuses its Australian business on its Prelude floating LNG facility, its stake in the Chevron-operated Gorgon project and new supply for its Queensland export plant. The company still plans to grow LNG sales by 4% to 5% a year through 2030.
