In a bid to optimize its Australian portfolio, Shell Australia, a wholly owned subsidiary of the UK-headquartered Shell, has struck a deal to divest its interest in a gas and liquefied natural gas (LNG) project with XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC), which includes Abu Dhabi Development Holding Company (ADQ) and global investment firm Carlyle.
Shell has signed an agreement to sell its 16.67% non-operated interest in the North West Shelf (NWS) project to wholly owned subsidiaries of XRG for a base consideration of $1.45 billion, subject to customary adjustments, plus an additional milestone-linked contingent payment. This project comprises interconnected joint ventures involving Woodside, Chevron, BP, Shell, MIMI, and CNOOC.
The transaction, which has an effective date of January 1, 2026, is expected to close in 2027, subject to several conditions precedent, including regulatory approvals. Shell’s 16.67% interest entails associated upstream interests, pipeline, and midstream infrastructure.
The firm’s interest also covers varying participating interests in related petroleum and pipeline titles, project agreements, offtake arrangements, NWS project companies, and CNOOC-related joint ventures.
This sale follows Shell’s divestment of 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.
Given that declining production from the original NWS fields has created capacity at the project’s Karratha gas plant, plans were put in motion to extend the life of the project with the North West Shelf Project Extension using existing infrastructure so that it can continue to support local and global energy security, as well as regional development opportunities in Western Australia.
"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. We are proud of the role we played as a founding partner in NWS and the role NWS has in turn played in Western Australia."
Shell continues to invest in LNG and integrated gas globally and will grow LNG sales by 4-5% per year to 2030. The company, which 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.