XRG closes Southern Gas Corridor stake purchase from Azerbaijan
The ADNOC investment arm takes an equity position in the 3,500-kilometer pipeline network as it assembles a gas portfolio across the Caspian.
Tariq Benali Tariq Benali covers business and corporate news across the UAE and MENA for Anecdoted, tracking the deals, leadership moves and regulatory shifts behind the region's companies. tariq@anecdoted.com
XRG, the international investment arm of the Abu Dhabi National Oil Company (ADNOC), said Tuesday that it has closed its purchase of an equity stake in Southern Gas Corridor CJS, buying the interest from Azerbaijan's Ministry of Economy.
The position sits inside a 3,500-kilometer integrated network that carries natural gas from the Azerbaijani sector of the Caspian Sea across Georgia and Türkiye to Southern Europe. The assets tied to the deal include interests in the Shah Deniz gas and condensate field, the South Caucasus Pipeline, the Trans Anatolian Pipeline and the Trans Adriatic Pipeline, along with shares in Azerbaijan Gas Supply Company. XRG puts the network's delivery capacity at up to 26 billion cubic meters of gas a year.
XRG describes the acquisition as a way to gain more certainty over how its gas reaches buyers, to widen and add flexibility to its portfolio, and to move future volumes to market more cheaply by using pipelines that are already in place. The company also says the deal strengthens energy security and supports export growth and economic development in the region.
"This completion is a defining step in the development of XRG's integrated Caspian strategy," Mohamed Al Aryani, president of international gas at XRG, said in a statement.
The purchase follows a February document covering the sale of the SGC stake, signed in Abu Dhabi in the presence of Azerbaijan's President Ilham Aliyev and UAE President Sheikh Mohamed bin Zayed Al Nahyan. XRG casts the transaction as a deepening of the energy partnership between the UAE and Azerbaijan.
Elsewhere in Azerbaijan, XRG holds a 30% interest in the Absheron gas and condensate field and is pursuing further opportunities that could use the export infrastructure already built. In June, ADNOC, SOCAR, TotalEnergies and Türkiye's BOTAS signed a 15-year natural gas sales agreement covering Absheron production, a total of 33 billion cubic meters with supply beginning in 2029.
Across the Caspian, XRG holds a 38% participating interest in Turkmenistan's offshore Block I gas and condensate concession. That asset produces about 400 million cubic feet of natural gas a day and gives access to more than seven trillion cubic feet of gas resources, according to the company.
"By combining world-class gas resources in Azerbaijan and Turkmenistan with strategic export infrastructure, we are building a resilient platform that connects advantaged supply with growing regional and European demand," Al Aryani said.
XRG has been active outside the Caspian as well. This week it joined ADNOC and Securing Energy for Europe (SEFE), the German state-owned energy company, in an agreement to explore cooperation along the natural gas and LNG value chain. Last month it entered Venezuela through an offshore gas license holding more than 4 trillion cubic feet of proven resources, adding to its Latin American portfolio and its footprint in the Atlantic Basin.
