Browse LNG has been plagued by controversy over its proposed location at James Price Point on the north-western coast of Australia, which has been opposed by some project partners, environmentalists and Aboriginal landowners.
"Shell's increased participation may promote alternative development options such as floating LNG, should a land-based project prove to be too expensive or too impractical," Morgan Stanley analyst Stuart Baker said in a note.
Shell is regarded as the industry leader in developing floating LNG and expects to bring the world's first floating LNG, Prelude LNG, online by 2017.
Shell will pay $450m and swap interests in two fields off the Australian coast for Chevron’s holdings in the Browse LNG project, Shell said in a statement.
The deal will increase Shell's share in the development to around 27 per cent, according to analysts, and make it the second largest shareholder after operator Woodside Petroleum.