XRG, the low-carbon energy and chemicals investment arm of Abu Dhabi National Oil Company (Adnoc), has entered into an agreement to acquire a stake in Southern Gas Corridor (SGC), an energy holding company owned by the government of Azerbaijan.
Adnoc signed a non-binding heads of terms with Azerbaijan’s Ministry of Economy during the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), aiming to strengthen energy cooperation between the UAE and Azerbaijan.
Formed in 2014, SGC is jointly owned by Azerbaijan’s Ministry of Economy and the State Oil Company of the Republic of Azerbaijan (Socar). The company’s assets include natural gas-producing operations and a 3,500km pipeline network stretching from the Caspian Sea through Turkey to southern Europe, capable of transporting up to 26 billion cubic metres annually.
SGC’s portfolio includes interests in the Shah Deniz gas and condensate field, the South Caucasus Pipeline, the Trans-Anatolian Pipeline, the Trans-Adriatic Pipeline, and the Azerbaijan Gas Supply Company.
Details regarding the size of the stake and financial terms of the acquisition were not disclosed.
In May 2024, Socar purchased a 3 per cent stake in Abu Dhabi’s Satah Al Razboot and Umm Lulu offshore concessions from Adnoc, marking its first international upstream investment.
XRG’s portfolio in the Caspian region includes a 30 per cent interest in the Absheron gas and condensate field, held alongside Socar, and a 38 per cent stake in an offshore concession in Turkmenistan.
Last month, XRG was also reported to be exploring investment opportunities in a liquefied natural gas (LNG) project being developed by Argentina’s state-owned YPF. The company has been actively pursuing global gas investments to expand its presence in the LNG sector.
Adnoc has expressed ambitions to develop a “world-scale integrated gas portfolio” and has shown a strong appetite for international expansion. Although its XRG-led consortium recently withdrew a USD 19 billion takeover offer for Australian LNG producer Santos, the group continues to pursue major strategic investments.
In September 2025, XRG completed the acquisition of an 11.7 per cent stake in the first phase of the Rio Grande LNG project in the United States. Established in November 2024, XRG is currently valued at around USD 80 billion.
