XRG Company, the international energy investment arm of ADNOC, has completed a deal to acquire a stake in the Southern Gas Corridor of Azerbaijan. This move allows XRG to expand its operations in the Caucasus region. XRG has received the necessary approvals from the Ministry of Economy of Azerbaijan for this stake purchase.
Details of the Deal and the Importance of the Southern Gas Corridor
The Southern Gas Corridor includes pipelines and gas fields and stretches approximately 3,500 kilometers from the Azerbaijani Caspian Sea to Europe. The capacity of this corridor to transport up to 26 billion cubic meters of natural gas annually is crucial, especially as Europe seeks to reduce its dependence on Russian gas.
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Additionally, the closure of the Strait of Hormuz due to existing tensions in the region has further highlighted the importance of the Southern Gas Corridor. The supply of gas from Qatar to global markets has decreased, increasing the need for alternative sources.
XRG's Strategies and Expansion of Activities
Reports indicate that XRG views this deal as a milestone in its strategy to establish a sustainable and integrated position in the gas sector in the Caucasus region. XRG is developing export infrastructure and upstream investments in Azerbaijan with the aim of connecting high-quality gas resources from the Caucasus to established routes for supply to regional and European markets.
XRG, established in 2024, is a low-carbon energy and chemical investment company valued at over $80 billion. The company is investing across various continents to expand its operations and plans to double the value of its assets over the next decade.
Currently, XRG holds a 30% stake in the Absheron gas and condensate field in Azerbaijan and a 38% stake in the gas and condensate concession site in Block I off the coast of Turkmenistan. Mohammed Alaryani, Head of International Gas at XRG, stated that the company is building a sustainable platform that connects profitable supplies to the growing demand in the regions and Europe by combining high-quality gas resources in Azerbaijan and Turkmenistan with strategic export infrastructure.
XRG has also entered Venezuela as part of its global expansion and last month received a license to develop an offshore natural gas project in this South American country in partnership with BP and Qatar's UCC.
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