Big oil groups Shell and Chevron have agreed to exchange interests in a number of assets in Australia, which will see the Anglo-Dutch giant build its stakes in a 'key' liquefied natural gas (LNG) plant.
Shell will exchange its 33.3% interest in the Clio-Acme fields in north-west Australia and a $450m cash payment for Chevron's interests in the Browse LNG project in western Australia (16.7% interest in the East Browse 'titles1' and 20% interest in the West Browse 'titles2').
Following completion of the transaction, Shell will hold a 35% interest in the West Browse titles and a 25% stake in the East Browse titles.
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"Shell is pleased to be growing its position in a major Australian gas resource and future Australian LNG supply project," said Andy Brown, the Upstream International Director for Shell.
"This is a good deal, not only because it aligns with Shell's strategy of bigger direct stakes in key gas resources, but because it also helps to simplify the ownership of the Browse gas fields," he said.
Companies are attempting to lock-in to the surging LNG market in Australia; the country is expected to overtake Qatar as the world's largest exporter of the commodity by the end of the decade.
However, according to Reuters, the Browse project has been hit by cost blowouts and infighting among its shareholders as they argue about its location. Meanwhile, it has experienced opposition from environmentalists and Aboriginal landowners, the news agency said.
Nevertheless, Brown said: "The Browse gas fields are a key LNG development opportunity for Australia. We're committed to continue working with Woodside (as operator), the other JV participants and key stakeholders to secure the best possible development plan for this important resource."
This deal is the latest in a series of recent achievements for Shell's LNG business in the Asia Pacific region and further demonstrates Shell's long term commitment to the region.
By 14:35 on Monday, shares in Shell were down 0.48% at 2,335.66p.
