Shell, the oil giant, has finalized a $22 billion agreement to purchase ARC Resources Ltd., uniting the primary partner in Canada’s inaugural operational liquefied natural gas project with a substantial producer in one of North America’s most lucrative shale areas. Wael Sawan, the CEO of the British-headquartered global energy powerhouse, emphasized on Monday that the deal “establishes Canada as a core region for Shell,” as the company had previously reduced its substantial presence in the oilsands. Sawan stated, “We are gaining access to uniquely positioned assets and welcoming skilled colleagues who bring profound expertise. This, combined with Shell’s robust basin-level performance, presents an attractive proposition for shareholders.”
ARC Resources focuses on the Montney, a shale formation spanning parts of northeastern British Columbia and northwestern Alberta. ARC’s CEO, Terry Anderson, expressed enthusiasm, stating, “Through this acquisition, we will unlock significant value and join a dynamic global energy leader capable of maximizing our business’s full potential and contributing to Canada’s promising energy future.”
Last year, ARC achieved a production of 374,000 barrels of oil equivalent per day before royalties. Its operations are in close proximity to Shell’s Montney holdings in both provinces. Tom Pavic, the President of Sayer Energy Advisors in Calgary, commented on the proposed acquisition, affirming, “It underlines the Montney’s status as a world-class resource play,” and suggested a potential increase in merger and acquisition activities within the Montney region.
Under the terms of the deal, ARC shareholders will receive 0.40247 of a Shell share and $8.20 in cash for each ARC share, totaling $32.80 per ARC share based on the closing prices for Shell shares and exchange rates on April 24, when ARC shares ended at $25.77. The overall transaction, inclusive of assumed debt, is valued at $22 billion.
Shell, along with four Asian partners, owns the LNG Canada plant in Kitimat, B.C., which commenced operations last summer. The plant processes natural gas from fields in the Montney and other regions of western Canada, converting it into a liquid state for export across the Pacific. The consortium is contemplating doubling the plant’s capacity, signaling a probable positive final investment decision.
Meanwhile, ARC is actively engaged in the LNG sector through long-term contracts as a supplier, including to LNG Canada. Additionally, it has signed a long-term liquefaction tolling services agreement with Cedar LNG, a plant under construction in Kitimat in partnership with Pembina Pipeline and the Haisla Nation.
Shell, once a major player in Alberta’s oilsands, divested its holdings in early 2025 through an asset-swap deal with Canadian Natural Resources Ltd. The company has since focused on gas production and export, refining oil into high-value products, and operating a chain of Shell-branded retail outlets. Analyst Andrew Dittmar from Enverus Intelligence Research highlighted the scarcity of attractive, long-term acquisition opportunities for energy majors like Shell and emphasized Canada’s appeal due to its high-quality gas resources in the Montney and crude in the oilsands.
The acquisition of ARC Resources by Shell is the latest development in the western Canadian shale gas sector. Recent transactions include Ovintiv Inc.’s plan to acquire NuVista Energy Ltd. for $3.8 billion and Cygnet Energy Ltd.’s agreement to purchase Kiwetinohk Energy Corp. for $1.4 billion. Enbridge Inc., a pipeline operator, has also shown optimism in Canadian natural gas with a $4 billion expansion plan for its Westcoast pipeline in B.C., which received federal approval to enhance its capacity in delivering gas from northern B.C. and southern Alberta to the Canada-U.S. border.
The completion of the Shell-ARC deal is subject to shareholder, court, and regulatory approvals, including those under the Investment Canada Act. The transaction is anticipated to conclude in the second half of this year.
