Shell is set to exit the North West Shelf (NWS) venture in Western Australia after agreeing to sell its 16.67% non-operated stake to XRG for $1.45bn.
The base consideration is subject to standard post-signing adjustments, with a further contingent sum payable upon the achievement of specified milestones.
Wholly owned subsidiaries of XRG, a UAE-headquartered energy investment group active across natural gas, chemicals and energy solutions, will serve as the acquiring entities.
Backdated to 1 January 2026, the transaction is expected to reach completion during 2027 once regulatory clearances and other conditions have been satisfied.
The disposal covers a broad package of assets tied to Shell's founding position in the project. Included are upstream production interests, pipeline and processing infrastructure, stakes in associated petroleum and pipeline licences, commercial offtake agreements and interests in NWS project entities.
Shell integrated gas president Cederic Cremers said: "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."
According to Shell, declining production from the original NWS fields has freed up processing capacity at the onshore Karratha Gas Plant, driving a gradual shift towards tolling arrangements for third-party gas. The company took a similar portfolio step in 2023 when it divested its position in the Browse offshore gas development.
Shell nonetheless retains a substantial operating presence in Australia.
It runs the QGC onshore gas project and the Prelude floating liquefied natural gas (LNG) facility, is progressing the Crux backfill development, and holds joint venture interests in Arrow Energy and the Chevron-operated Gorgon project.
Globally, Shell is targeting annual LNG sales growth of 4–5% through to the end of the decade.
For XRG, the deal represents its first foray into Australian LNG and positions the company closer to fast-growing Asia-Pacific gas markets.
NWS offers 14.3 million tonnes per annum of liquefaction capacity underpinned by an estimated 4.4 trillion cubic feet equivalent of remaining resources. Other venture partners alongside XRG will include Chevron, BP, MIMI and CNOOC.
XRG international gas president Mohamed Al Aryani said: “The North West Shelf combines immediate production, strategic infrastructure, and future upstream development opportunities, making it a strong fit with our long-term ambitions."
XRG will take on responsibility for future decommissioning costs associated with the acquired interests and has agreed to provide financial security against those obligations.
In its most recent financial results, Shell reported net income attributable to shareholders of $12.1bn for the third quarter of 2026, representing a more than twofold increase from the $5.3bn posted in the same period a year earlier.
The company attributed the stronger performance to record refining margins and higher commodity prices against a backdrop of ongoing global energy market disruption.
