* Deal includes initial payment of $947 mln
* Shell to take $350 mln impairment charge in 2nd-qtr
* Shell shares up 1.3 pct (Adds details, background, updates shares)
July 12 (Reuters) - Royal Dutch Shell Plc said it would sell its 45 percent stake in the Corrib gas venture to a unit of Canada Pension Plan Investment Board (CPPIB) for up to $1.23 billion, marking the oil company's exit from the upstream business in Ireland.
The deal includes an initial consideration of $947 million and additional payments of up to $285 million between 2018-2025, subject to gas price and production, Shell said on Wednesday.
The Anglo-Dutch company is on track to sell assets of about $30 billion by 2018 to cut debt following its $54 billion acquisition of BG Group.
Shell has also been working to mitigate climate change risks that have upset some investors.
The development of the Corrib gas field, discovered in 1996, has faced protests since 2005 by residents concerned that the laying of a high-pressure pipeline to bring gas onshore could pollute their water supply.
CPPIB, Canada's biggest public pension fund, and Vermilion Energy Inc will become the new operator of the gas field off the north-west coast of Ireland.
For CPPIB, the deal is another step in its pursuit to diversify beyond domestic markets. The fund's most recent deal in the energy sector was to invest up to $1 billion to acquire U.S. oil and gas assets.
The transaction will result in an impairment charge of around $350 million in Q2 2017, Shell said.
The transaction, which is subject to partner and regulatory approval, is expected to complete in the second quarter of 2018, the company said.
Norway's Statoil, which owns a 36.5 per cent stake in the Corrib gas field venture, did not immediately respond to a request for comment.
Shares in Shell were up 1.3 percent at 2071 pence at 1157 GMT. (Reporting by Rahul B and Yashaswini Swamynathan in Bengaluru and Gwlady Fouche in Norway; Editing by Jane Merriman and Shounak Dasgupta)