Abu Dhabi XRG Buys Shell’s North West Shelf Stake for $1.45 Billion in Australia

Abu Dhabi’s XRG has agreed to acquire Shell’s 16.67% non-operated stake in Australia’s North West Shelf liquefied natural gas (LNG) project for $1.45 billion (Dh5.3 billion), marking its first investment in Australian LNG and another step in its international energy expansion.

The agreement, announced on November 3, 2026, will give XRG an interest in one of Australia’s longest-running LNG developments. The transaction remains subject to regulatory approvals and other conditions, with Shell expecting it to close in 2027.

The deal includes a base consideration of $1.45 billion, subject to customary adjustments, alongside an additional milestone-linked contingent payment. XRG’s subsidiaries will also assume the associated decommissioning obligations under the agreement.

XRG is wholly owned by Abu Dhabi National Oil Company (ADNOC), the UAE’s state energy group. The acquisition expands the Abu Dhabi-based company’s international gas portfolio and gives it a stake in an established LNG operation serving global markets.

XRG’s first Australian LNG investment

The North West Shelf acquisition represents a new geographical milestone for XRG, bringing the Abu Dhabi company into Australia’s LNG sector for the first time.

The company is acquiring Shell Australia’s 16.67% non-operated interest in the project. The stake includes associated upstream interests, pipeline and midstream infrastructure, project agreements, offtake arrangements and interests in related joint ventures.

XRG’s investment strategy focuses on building an international portfolio across natural gas, chemicals and energy solutions. The acquisition gives the company access to existing production and infrastructure, while adding an Australian asset to its global energy holdings.

The transaction also follows XRG’s earlier interest in expanding its presence in Australia. In 2025, the company pursued an $18.7 billion offer for Santos, but terminated the proposal after commercial terms could not be agreed.

What is the North West Shelf LNG project?

The North West Shelf project is Australia’s first LNG project and has operated for more than four decades. It is located in Western Australia and is operated by Woodside Energy.

Its Karratha Gas Plant is situated approximately 1,260 kilometres north of Perth. The facility processes natural gas to produce LNG, domestic gas, condensate and liquefied petroleum gas (LPG).

The project has a liquefaction capacity of 14.3 million tonnes per year and 4.4 trillion cubic feet equivalent of remaining resources, according to the deal information reported by Gulf News.

Most of its LNG volumes are supplied to customers in Japan. The project has also delivered more than 6,000 petajoules of domestic gas to Western Australia, making it an important contributor to the region’s energy supply.

The North West Shelf is operated through interconnected joint ventures involving Woodside, Chevron, BP, Shell, MIMI and CNOOC. XRG’s acquisition will add another major international energy investor to the project’s ownership structure.

Why the deal matters for Abu Dhabi’s energy strategy

The acquisition gives Abu Dhabi’s XRG a foothold in Australia’s LNG industry and access to established infrastructure in a major gas-exporting country.

For XRG, the transaction adds an operating asset to its international portfolio rather than requiring it to develop a new LNG project from the ground up. It also positions the company within a supply network that serves customers across the Asia-Pacific region.

The investment comes as XRG pursues its ambition to build a leading international gas business. Access to LNG infrastructure and established export relationships can form part of a broader strategy to expand its role in global gas markets.

The deal also highlights the international reach of Abu Dhabi’s energy investment activity. Through ADNOC’s wholly owned subsidiary, the emirate is increasing its exposure to energy assets beyond the UAE.

XRG’s expansion is taking place alongside broader developments in the UAE’s infrastructure and technology sectors. Readers can also explore our coverage of Dubai’s airport self-service and biometric upgrades and the UAE’s 10-year Starlink licence, which examine other areas of the country’s wider economic and infrastructure development.

XRG will assume decommissioning obligations

Under the agreement, XRG’s subsidiaries will take on the decommissioning obligations associated with the acquired interest.

Decommissioning refers to the process of safely closing and removing or managing infrastructure when it is no longer required. For major offshore and gas projects, these responsibilities can represent significant long-term commitments.

The transaction therefore involves more than the acquisition price. XRG will also assume responsibilities connected with the asset’s eventual retirement, subject to the terms of the agreement.

The additional milestone-linked contingent payment is another component of the transaction. Shell has not disclosed the amount of this potential payment in its announcement.

Shell said the agreement has an effective date of January 1, 2026, while completion is expected in 2027, subject to regulatory approvals and other conditions.

Shell’s decision to sell the North West Shelf stake

For Shell, the sale forms part of its capital allocation strategy and its decision to focus investment on selected integrated gas positions.

The company described the North West Shelf as a mature, non-operated asset. It said the project is moving towards a third-party toll-processing model, in which infrastructure is increasingly used to process gas supplied by other parties.

Shell’s exit from the 16.67% interest does not mean the company is withdrawing from Australia’s energy sector.

It continues to operate and invest in other Australian projects, including Shell QGC and Prelude FLNG, while also developing Crux and maintaining joint venture interests in Arrow Energy and Gorgon.

Shell has also stated that it expects to grow its LNG sales by 4% to 5% annually through 2030.

What happens next?

The XRG-Shell transaction is not yet complete. Regulatory approvals and other conditions must be satisfied before the acquisition can close.

Shell expects the deal to be finalised in 2027. Once completed, XRG will hold a 16.67% non-operated interest in the North West Shelf project and assume the related decommissioning obligations.

The transaction marks a significant development in Abu Dhabi’s international energy investment activity, giving XRG its first Australian LNG asset while adding a stake in a long-established gas project.

For the UAE, the acquisition also reflects the growing international footprint of ADNOC’s investment arm as it seeks to expand its natural gas business and strengthen its position across global energy markets.