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Shell (RDS.A) to Divest 26.25% Interest in QCLNG for $2.5B

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Royal Dutch Shell Plc.  has announced that its fully-owned subsidiary QGC Common Facilities Company Pty Ltd decided to divest a 26.25% stake in its Queensland Curtis LNG (QCLNG) facilities to Global Infrastructure Partners Australia– a leading global infrastructure investment fund. The deal worth $2.5 billion is in sync with the company’s strategy to divest its non-core assets with the aim of further enhancing and streamlining its portfolio.

Shell intends to earn around $4 billion a year by selling its non-core assets. Its minority interest sale in Queensland Curtis LNG will enable it to achieve its target set for this year following the divestment of its Martinez refinery and Appalachia shale gas assets.

Further, the Queensland Curtis LNG sell-off will add to Shell’s anticipated divestment-generated funds minus any effect on the company's workforce or the activities of its QCLNG venture. The divestiture will align Shell’s share in the QGC Common Facilities with its 73.75% interest in the entire QCLNG project.

The transaction is estimated to close by the first half of next year. It is contingent on customary conditions and regulatory consents in Australia. Upon completion of the sale, Shell will remain the majority owner and operator of the Common Facilities alongside CNOOC Limited (CEO - Free Report) (50% equity in Train 1) and Tokyo Gas (2.5% equity in Train 2).

Company Profile

Shell is one of the primary oil majors — a group of U.S. and Europe-based big energy multinationals — with global operations. The company is fully integrated as it participates in every energy-related aspect, right from oil production to refining and marketing.

Zacks Rank & Key Picks

Shell currently has a Zacks Rank #4 (Sell).

Some better-ranked players in the energy space are Hess Midstream Partners LP (HESM - Free Report) and China Petroleum & Chemical Corporation , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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