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British energy company Shell has agreed to sell its 35% non-operated stake in the Aphrodite offshore gas field in the Eastern Mediterranean to Hungarian oil and gas company MOL Group for $720 million.
The sale, announced Friday, is part of Shell's strategy to strengthen its integrated liquefied natural gas (LNG) business, with the transaction expected to close in early 2027.
The Aphrodite gas field, discovered in 2011, is located about 170 kilometers (105.63 miles) southeast offshore in Block 12 and is estimated to hold around 100 billion cubic meters (bcm) of recoverable natural gas.
The project is expected to produce up to 800 million cubic feet of gas per day from four production wells, with all output transported to Egypt via a subsea pipeline and sold to the Egyptian Natural Gas Holding Company (EGAS).
Recent agreements envisage gas sales to Egypt for at least 15 years, with a final investment decision targeted for 2027 and first gas expected around 2031.
The project is operated by Chevron, which holds a 35% interest. Shell owns another 35% through BG Cyprus, while Israel's NewMed Energy holds the remaining 30%. Once the deal closes, MOL will assume Shell's rights and obligations associated with the stake.
Shell acquired the interest through its acquisition of BG Group in 2016, after BG Cyprus bought into the project in 2015. The partners approved the development and production plan in 2025, although a final investment decision has yet to be made.
Shell said it had worked with government authorities and its joint venture partners to advance the project to its current stage before deciding to realize the value created.
"We believe Aphrodite remains an attractive development opportunity and will play an important role in supporting regional energy needs," Cederic Cremers, Shell's Integrated Gas President, said.
"Our decision to exit is driven by disciplined capital allocation and portfolio choices, as we focus on opportunities that strengthen our integrated LNG value chain."
The divestment comes as the company presses ahead with expanding its LNG portfolio. Earlier this week, Shell said it expects to make a final investment decision on the second phase of its LNG Canada project by the end of 2026.
The company also reported second-quarter net profit of $9.8 billion, more than doubling from a year earlier and topping market expectations.
Its integrated gas business generated earnings of $2.7 billion, up 55% year-over-year despite a 31% quarter-on-quarter decline in gas production.
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