Oil giant Shell has finalized a $22 billion agreement to purchase ARC Resources Ltd., uniting the primary partner in Canada’s initial operational liquefied natural gas project with a significant producer in one of North America’s most lucrative shale regions. Wael Sawan, the CEO of the UK-based global energy powerhouse, declared on Monday that the deal “establishes Canada as a core area for Shell,” which had previously reduced its substantial presence in the oilsands. ARC Resources concentrates on the Montney, a shale formation spanning parts of northeastern British Columbia and northwestern Alberta. ARC’s CEO, Terry Anderson, expressed optimism, stating that the deal will enable them to maximize their potential and join forces with a dynamic global energy leader.
Last year, ARC achieved daily production of 374,000 barrels of oil equivalent 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, noted that the proposed acquisition underscores the Montney’s exceptional resource potential, predicting increased merger and acquisition activity in the region.
Under the agreement, ARC shareholders will receive 0.40247 Shell shares and $8.20 in cash for each ARC share. Based on the closing prices of Shell shares and exchange rates on April 24, the offer values each ARC share at $32.80. The total deal, including assumed debt, is valued at $22 billion. Shell, along with four Asian companies, owns the LNG Canada plant in Kitimat, B.C., which commenced operations last summer. The consortium is considering doubling the plant’s capacity through a second phase, with industry experts indicating a favorable final investment decision following the recent deal.
ARC’s involvement in the LNG sector includes long-term contracts as a supplier to LNG Canada and a liquefaction tolling services agreement with Cedar LNG, a plant under construction in Kitimat. Following the divestment of its oilsands holdings in early 2025, Shell has focused on gas production and export, refining, and operating a network of Shell-branded retail outlets in Canada. Analysts highlight Canada’s appeal as an investment destination, particularly the Montney’s rich gas reserves and the oilsands’ crude resources, making it an attractive proposition for global energy companies like Shell.
The recent acquisition is part of a trend of acquisitions in the western Canadian shale gas sector. Enbridge Inc. has shown confidence in Canadian natural gas by proposing a $4 billion expansion of its Westcoast pipeline in B.C., which received federal approval last week. The Shell-ARC deal is subject to shareholder, court, and regulatory approvals, including under the Investment Canada Act. The transaction is anticipated to be completed in the latter half of this year.
