Shell to sell 16.67% stake in Australian LNG project for $1.45 billion
Key Facts
Shell Australia said on November 3, 2026, it had agreed to sell its 16.67% non-operating stake in the North West Shelf LNG project to wholly owned affiliates of XRG for a base consideration of $1.45 billion. The consideration also includes a contingent payment tied to the achievement of milestones, while the price is subject to customary adjustments, according to a Shell statement. The company’s integrated gas director said the agreement “reflects our commitment to disciplined capital allocation and portfolio choices.” Shell says the sale focuses its investments on advantaged integrated gas positions, while it expects LNG sales to grow at an annual rate of 4% to 5% through 2030. The stake includes interests related to upstream operations, pipelines and midstream processing infrastructure, not a stake in the liquefaction facility alone.
The agreement is due to take effect from January 1, 2026, with closing in 2027 after conditions precedent, including regulatory approvals, are met, according to Shell. The buyers will assume facility decommissioning obligations at the end of its operating life and provide guarantees related to those obligations. The deal marks XRG’s first asset in Australia, according to a Reuters report. The company has expanded its presence in the U.S. LNG market; in July 2026, it announced the acquisition of an additional 7.6% stake in trains 4 and 5 of the Rio Grande LNG project, giving it interests in all five trains under construction at the 30 million-tonne-a-year project. As part of XRG’s entry into Australia, the company made an on-market offer in 2025 to acquire Santos for $18.7 billion, before ending it in mid-September after failing to agree on commercial terms.
North West Shelf is located in Western Australia and combines LNG development with gas for the domestic market, as part of interconnected joint ventures involving Woodside, Chevron, BP, Shell, MIMI and CNOOC. Woodside figures show its share of project production was 31.2 million barrels of oil equivalent in 2025, down from 38.1 million in 2024; the company attributed the decline to the gradual depletion of reservoirs. The decline provides the operating backdrop to the sale, as Shell says lower output from the original fields has freed capacity at the Karratha plant. The project is moving toward combining production from its own resources with the processing of third-party gas for facility-use fees. In February 2026, reports said Shell was in preliminary talks about selling a stake in the project and cited a total value of A$34 billion for the gas export facility; the agreement announced in November sets the base consideration for Shell’s stake at $1.45 billion.
Operating data reflect the contraction of some parts of the existing infrastructure alongside efforts to secure additional gas for processing. In 2025, the Karratha plant processed 11.5 million barrels of oil equivalent of Pluto gas through the Pluto-KGP link, down 2.5% from 2024, according to Woodside’s annual report. The permanent retirement of LNG Train 2 was completed in the second quarter of 2025, reducing the plant’s capacity to 14.3 million tonnes a year. Discussions continued between project partners and other resource owners on processing additional volumes of gas and using available capacity. Woodside also said it plans to close a second train at the North West Shelf facility during 2027, alongside declining output from older fields and efforts to process more third-party gas. This underscores the importance of Karratha’s ability to receive resources from outside the original fields, a capacity Shell cites as part of the deal’s context.
The project extension received approval from the Western Australian government in December 2024, followed by federal government approval in September 2025, according to Woodside. The approvals included conditions relating to cultural heritage management, air quality and emissions monitoring. Federal approval supports continued operations and the processing of third-party gas resources at the Karratha plant through 2070. This long horizon puts the plant’s infrastructure at the center of a shift from reliance on the original fields toward using processing capacity for additional gas. Shell’s deal remains subject to the completion of its conditions and approvals, with a contractual effective date of January 1, 2026, and closing expected in 2027. Once completed, the stake and its associated specified interests and obligations will transfer to XRG affiliates.