Shell to sell North West Shelf stake to XRG for $1.45 billion

By Helen Clark and Yadarisa Shabong

Nov 3 (Reuters) - Abu Dhabi's XRG will buy Shell's SHEL.L stake in the Woodside Energy-operated North West Shelf project for $1.45 billion, giving the ADNOC subsidiary its first Australian asset.

The North West Shelf project, one of Australia's biggest liquefied natural gas export facilities, comprises a number of interconnected joint ventures involving Woodside WDS.AX, Chevron CVX.N, BP BP.L, Shell, China's CNOOC, and Japan LNG, which is made up of Mitsui and Mitsubishi.

The sale of the 16.67% non-operated interest is expected to close in 2027. The deal includes an additional milestone-linked contingent payment on top of the base consideration, Shell said in a statement.

It also contains a provision that XRG will assume all decommissioning obligations.

As first reported by the Australian Financial Review, the Abu Dhabi-headquartered company recently set up two local holding companies in Australia, registered with the Australian Securities and Investments Commission.

In 2025 it made an on-market offer for Australia's Santos STO.AX for $18.7 billion, which it terminated in mid-September, saying commercial terms could not be agreed.

Analysts have suggested the company may look to take a stake in the Browse gas fields that are to feed the North West Shelf.

BP BP.L has recently sold down its holding in the fields to Osaka Gas and South Korea's GS Energy after buying Shell's 27% holding in 2023 for an undisclosed price.

Woodside recently bought PetroChina's 10.67% stake in the Browse fields, pre-empting a deal PetroChina had struck with Inpex 1605.T.

The Australian company said in its third-quarter results released late last month that it was planning to shut a second train at the North West Shelf facility in 2027.

The shut-in comes as production declines from legacy fields and the facility moves to seeking more third-party gas to process until the Browse fields come online.

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

In Australia it has been focussed on the Taroom Trough in Queensland, which could be a new source of supply for its QCLNG export facility. It also operates the Prelude floating LNG facility offshore Australia and has a stake in the Chevron-operated Gorgon LNG venture.