Shell Australia has agreed to sell its 16.67% interest in the North West Shelf (NWS) project offshore/onshore Western Australia to subsidiaries of XRG P.J.S.C.

The base consideration is $1.45 billion, with an additional milestone-linked contingent payment. The transaction should close in 2027, subject to regulatory approvals.

Terms include the buyers assuming decommissioning obligations.

The NWS project is an LNG and domestic gas development led by Woodside: Chevron, BP, MIMI and CNOOC are the other co-venturers.

Shell’s 16.67% stake covers associated upstream interests, pipeline and midstream infrastructure; and varying participating interests in related petroleum and pipeline titles, project agreements, offtake arrangements, NWS project companies, and CNOOC-related joint ventures.

Declining production from the original NWS fields, the company pointed out, had opened spare capacity at the project’s onshore Karratha Gas Plant, with the project now transitioning to a mixed resource-production and third-party toll-processing business.

Cederic Cremers, Shell’s Integrated Gas president, said: “The sale realises value from a mature, non-operated asset and supports Shell’s strategy by focusing investment on advantaged integrated gas positions, as NWS transitions in the future towards a third-party toll-processing model.”

The company will maintain a presence in Australia, where it operates the Shell QGC project and Prelude FLNG, is developing the Crux project and is a joint venture partner in Arrow Energy and the Gorgon subsea-shore gas development.