XRG completes Southern Gas Corridor deal, expanding Caspian gas route to Europe

XRG, Adnoc's international energy investment unit, has finalized its acquisition of a stake in the Southern Gas Corridor, a strategic project in the Caspian region. The Abu Dhabi-based company received all necessary regulatory approvals to finalize the equity shareholding it acquired from Azerbaijan's Ministry of Economy, as per XRG's statement on Tuesday. Although the financial specifics of the deal remain undisclosed, the transaction was initially announced in November.

The Southern Gas Corridor, a 3,500km pipeline network stretching from the Azerbaijani Caspian Sea section through Georgia, Turkey, and into Southern Europe, can transport up to 26 billion cubic meters of natural gas annually. It plays a crucial role in supplying Europe, especially with the closure of the Strait of Hormuz due to the Iran conflict and dwindling gas supplies from Qatar to global markets.

Europe is increasingly seeking alternative energy sources to reduce its dependence on Russian gas amid the ongoing Ukraine war.

XRG's strategic stake in the Southern Gas Corridor marks a significant milestone in its ambition to build an integrated and resilient gas position across the Caspian region. Through its investments in export infrastructure and upstream operations in Azerbaijan, XRG aims to connect high-quality Caspian resources with established routes to expanding regional and European markets.

Founded in 2024, XRG is an international low-carbon energy and chemicals investment company with an enterprise value surpassing $80 billion. The company plans to double its asset value over the next decade, leveraging the energy transition, AI growth, and the rise of emerging economies.

XRG's Caspian expansion continues, with a 30% interest in Azerbaijan's Absheron gas and condensate field and a 38% stake in Turkmenistan's offshore Block I gas and condensate concession site. Mohamed Al Aryani, President of International Gas at XRG, emphasized the company's commitment to building a resilient platform that connects advantageous supply with growing regional and European demand.

In addition to its Caspian ventures, XRG has also secured a license to develop an offshore natural gas project in Venezuela, joining forces with BP and Qatar's UCC.