ADNOC’s XRG invests in Azerbaijan Gas Field, aiming to build “lasting value” for UAE

Abu Dhabi's ADNOC's investment arm, XRG, has announced plans to expand its stake in the Absheron gas field in Azerbaijan. This move is part of a broader strategy to leverage UAE energy expertise in overseas businesses that benefit the country. XRG is set to move forward with the next phase of the Absheron field, an offshore location approximately 100 kilometers southeast of Baku.

The expansion is expected to unlock up to five trillion cubic feet of recoverable gas, with production commencing in 2029 and increasing daily output from 150 million to 600 million cubic feet.

Ali Al Hammadi, Asset Management Manager for International Gas at XRG, stated that the company aims to transform UAE expertise into businesses that generate lasting value for the country, while simultaneously fostering skills and partnerships for the future. The investment seeks to extend beyond financial contributions, involving collaboration with partners on project development, cost management, and customer service, drawing upon ADNOC's wealth of experience.

Emirati professionals are actively engaged in international projects, gaining knowledge from global partners to implement in these ventures.

XRG's investment in the Absheron field is a 30% stake, shared with Azerbaijan's state energy company SOCAR and France's TotalEnergies. This partnership was formalized in August 2023 and later transferred to XRG, which ADNOC established in November 2024, and is managed through three other entities: International Gas, Global Chemicals, and Energy Solutions.

Before committing to the expansion, the partners secured a long-term gas sales agreement with Türkiye's BOTAŞ. This newly acquired gas will be distributed to customers in Azerbaijan and Türkiye through pipelines connected to broader European markets.

The XRG also maintains a stake in the Southern Gas Corridor, a 3,500-kilometer pipeline network that transports Azerbaijani gas from Georgia and Türkiye to Europe. ADNOC's XRG commenced production from the first phase of Absheron in 2023, supplying customers within Azerbaijan. The company envisions its chemicals portfolio, which includes Borouge, Covestro, and Fertiglobe, will deliver steady earnings despite the Absheron expansion. Additionally, ADNOC approved a $6.2 billion investment in the Umm Shaif gas development.