Shell is reportedly in preliminary talks to sell a minority stake in the Woodside Energy-operated North West Shelf (NWS) liquefied natural gas project in Western Australia. Potential buyers named include Abu Dhabi National Oil Company (Adnoc) and Midocean Energy LLC.

Divestment Rationale and Context

Shell is considering this divestment of its one-sixth interest, which could be worth over US$3 billion, as part of its regular portfolio assessment for disciplined capital allocation. The primary reason for the potential exit is the project's planned transition into a third-party tolling facility, a business model that does not align with Shell's broader strategy and portfolio, despite the company's global expansion in LNG. This follows a similar strategic move three years ago when Shell divested its stake in the Browse asset to BP.

Project Details and Stakeholders

The NWS LNG project is Australia's oldest and largest liquefaction plant, operated by Woodside Energy. Other partners include BP, China’s CNOOC, and Japan’s Mitsui and Mitsubishi pairing. The plant's current nameplate capacity is 14.3 million tonnes per annum, reduced from 16.9 million tpa after Train 2 was permanently shut down in July due to declining gas supply.

Confirmation and Status

Shell's spokesperson confirmed the company works closely with NWS partners to deliver value, while Woodside's acting CEO noted Shell is looking for an offtake for its equity. The report of talks with Adnoc and Midocean originates from Bloomberg, and Upstream has approached Midocean for comment.