Adnoc’s XRG buys Shell’s North West Shelf stake for USD 1.4 bn, its first foothold in Australian LNG

Adnoc is adding Australian LNG to its portfolio, with gas it can sell into Asia without going through the Strait of Hormuz. XRG, Adnoc’s international energy investment arm, is buying Shell’s 16.7% non-operated stake in Australia’s North West Shelf LNG project for a base consideration of USD 1.45 bn, plus a milestone-linked contingent payment, the two companies said in statements (here and here). This is XRG’s first move into Australian LNG.

Gulf producers have been moving faster to secure LNG outside the strait since the war began. XRG wants to rank among the world’s top five LNG suppliers, a push that started before the war. The disruption to Gulf energy flows has made it more urgent for the region’s companies to find assets elsewhere to keep customers supplied, Bloomberg says, and Qatar is doing the same to cut its exposure to Hormuz. XRG says North West Shelf puts it close to demand growth in Asia-Pacific.

XRG gets the whole chain, from gas fields to offtake: The stake includes upstream gas interests, pipeline and midstream infrastructure, and offtake arrangements, alongside Shell’s share of liquefaction capacity. North West Shelf, Australia’s first LNG project and operated by Woodside, can liquefy 14.3 mn tons a year, almost 3% of global capacity, Bloomberg reports. Shell’s share is about 2.4 mn tons a year, which puts the base price at roughly USD 600 per ton of annual capacity, by our math. XRG also takes on Shell’s share of the project’s decommissioning obligations.

For Shell, the sale is a way out of a mature asset: “The sale realizes value from a mature, non-operated asset,” says Cederic Cremers, Shell’s integrated gas president.

Mature, in this case, means the original fields are running down: Declining output from North West Shelf’s original fields has unlocked capacity at the Karratha Gas Plant, and the project is moving toward a mix of its own production and processing third-party gas for a fee, according to Shell. Woodside’s Browse development would pipe gas about 900 km to Karratha, but it is still in concept definition, with regulatory approvals ongoing. Bloomberg says the contingent payment may be linked to Browse, in which Shell sold its own interest in 2023.

XRG is returning to Australia after walking away from Santos: An XRG-led consortium with ADQ and Carlyle dropped its USD 18.7 bn bid for Australian gas producer Santos in September 2025. XRG then entered preliminary talks with Shell over the North West Shelf in February 2026, with Aramco-backed MidOcean Energy also reportedly interested.

Australia now sits alongside LNG wagers XRG has made in the Americas: XRG holds equity in all five trains of the Rio Grande LNG development in Texas, alongside a 20-year agreement to buy 1.9 mn tons annually, and is backing a USD 24 bn LNG project in Argentina with YPF and Eni. Adnoc has combined its LNG marketing and trading operations into a platform targeting a marketable portfolio of 47 mn tons annually by 2035, bringing together Adnoc Gas, XRG, and Adnoc Trading. It is also expanding its Asian customer base, including an agreement to supply Thailand’s Gulf Group with around 2 mn tons of LNG starting in 2027.