XRG secures agreement for $1.45bn Australian LNG stake

Abu Dhabi’s XRG has agreed to acquire Shell’s 16.67 per cent interest in Australia’s North West Shelf liquefied natural gas project for $1.45 billion, marking its first investment in the country’s LNG industry.

The agreement, announced on Tuesday, covers Shell Australia’s non-operated holding in the Woodside Energy-managed development in Western Australia. The base purchase price is subject to customary adjustments, with an additional payment dependent on specified milestones, the companies said.

Completion is expected in 2027, subject to regulatory approvals and other conditions. Although the transaction has an effective date of 1 January 2026, ownership will not transfer until the sale closes. Wholly owned subsidiaries of XRG will acquire the interest.

The purchase includes associated gas production assets, pipelines and processing infrastructure, together with interests in petroleum titles, project agreements and LNG offtake arrangements. XRG will also assume decommissioning obligations associated with the assets and provide security for those commitments.

North West Shelf has annual LNG liquefaction capacity of 14.3 million tonnes and approximately 4.4 trillion cubic feet equivalent of remaining resources, according to XRG. The development supplies both export markets and domestic gas customers, making its continued operation important to Western Australia’s energy system.

Mohamed Al Aryani, president of XRG International Gas, said the investment would advance the company’s plans to build an international gas business serving demand across the Asia-Pacific region. He identified existing production, established infrastructure and potential upstream developments as attractions of the project.

Al Aryani said continued investment could help sustain domestic gas deliveries, strengthen regional energy security and support employment. Those benefits remain company expectations rather than commitments quantified in the acquisition announcement.

For Shell, the disposal forms part of a strategy to direct capital towards integrated gas operations offering stronger competitive advantages. Cederic Cremers, Shell’s president of integrated gas, described North West Shelf as a mature asset in which the company does not exercise operational control.

“The sale realises value from a mature, non-operated asset,” Cremers said, adding that Shell intended to focus investment on other integrated gas positions as North West Shelf moves towards processing more gas supplied by third parties.

The transaction comes as production from the project’s original offshore fields declines. That reduction has freed capacity at the Karratha Gas Plant, prompting a transition towards a business combining production from existing fields with processing services for other gas producers.

Woodside has indicated that another processing train at the facility is scheduled to close in 2027 as supplies from older fields diminish. Securing additional feed gas will therefore be central to maintaining utilisation of the project’s infrastructure over the longer term.

The proposed Browse development is among potential sources of future supply. Its concept involves transporting offshore gas to Karratha for processing through North West Shelf facilities, although development remains subject to separate investment decisions and approvals.

XRG’s entry follows an unsuccessful attempt to acquire Australian gas producer Santos. A consortium led by the Abu Dhabi company abandoned its proposed $18.7 billion takeover in September 2025 after the parties failed to agree commercial terms. The North West Shelf transaction instead provides a minority interest in an established operating asset.

The acquisition also adds an Australian position to XRG’s international natural gas portfolio. The investment company, wholly owned by Abu Dhabi National Oil Company, is pursuing opportunities across gas, chemicals and energy solutions, with Asian demand forming an important part of its LNG strategy.

Shell said the sale would not signal a withdrawal from Australia’s energy sector. It continues to operate the Queensland Curtis LNG business and Prelude floating LNG facility, is developing the Crux gas project and retains joint venture interests in Arrow Energy and Gorgon.

The company also reiterated its expectation that global LNG sales will increase by between 4 and 5 per cent annually through 2030, reflecting its continuing emphasis on integrated gas despite the disposal of the North West Shelf interest.

North West Shelf consists of interconnected ventures involving Woodside, Chevron, BP, Shell, Japanese interests represented by Mitsui and Mitsubishi, and China’s CNOOC. Shell’s participating interests vary across the associated petroleum licences, infrastructure and commercial arrangements.

Shell previously sold its interest in Browse in 2023. Its latest agreement includes interests in North West Shelf project companies and certain joint ventures associated with CNOOC, alongside the principal 16.67 per cent holding and related infrastructure assets.