Shell to sell US$1.5 billion stake in Australian LNG plant to Adnoc energy investment arm

[DUBAI] The energy investment arm of Abu Dhabi’s state oil producer agreed to pay US$1.45 billion for Shell’s stake in an Australian natural gas project, the latest in a series of deals as the Middle Eastern company seeks to expand globally.

Abu Dhabi National Oil Company’s XRG will buy the stake in the North West Shelf liquefied natural gas (LNG) project to gain greater access to customers in the Asia-Pacific region, the company said in a statement on Tuesday (Nov 3).

XRG will get access to a facility with capacity to liquefy 14.3 million tonnes a year of gas, it said. That is almost 3 per cent of global total LNG capacity. 

XRG has been scouring the world for supply as it aims to become among the world’s top five LNG suppliers.

That effort started even before the war in the Middle East severely disrupted energy flows out of the region, increasing the urgency for companies in the Gulf to find assets worldwide to keep customers supplied.

Rival exporter Qatar is similarly looking to expand LNG supplies outside the region to reduce its exposure to future disruptions in the Strait of Hormuz.

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XRG has signed deals for LNG capacity in countries including the US and Argentina. Tuesday’s agreement is the first in Australia after the company pulled a bid to buy local producer Santos in 2025. 

While Shell is continuing to double down on LNG, Bloomberg reported previously that it would explore a sale of its 16.67 per cent stake in North West Shelf due to a planned transition into a so-called third-party tolling facility, where buyers pay a fee to liquefy the gas.

“The sale realises value from a mature, non-operated asset,” Cederic Cremers, Shell’s integrated gas president, said in a separate press release.

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There will also be “an additional milestone-linked contingent payment,” Shell said in its statement, without specifying. That may be linked to plans to develop the Browse fields and ship the gas to North West Shelf. 

Woodside Energy Group operates North West Shelf, Australia’s oldest and largest liquefaction plant. Other partners include BP, CNOOC and a venture between Mitsui & Co and Mitsubishi. BLOOMBERG