Abu Dhabi’s XRG to expand in Turkmenistan with offshore gas field deal

Company teams up with Petronas to buy stake in Block I in Central Asia

Adnoc launched XRG, a $80 billion low-carbon energy and chemicals investment company in 2024. Victor Besa / The National

Adnoc’s global energy investment arm XRG is teaming up with Malaysia’s Petronas to expand its footprint in Central Asia with a stake in Turkmenistan's offshore gas and condensate field.

Petronas will hold a 57 per cent stake in Turkmenistan's Block I field, while XRG and the Turkmen state enterprise Hazarnebit will control 38 per cent and 5 per cent holdings in the asset respectively, XRG said in a statement on Wednesday.

Abu Dhabi-headquartered XRG and Petronas have also signed a long-term gas sales agreement with state company Turkmengas as part of the deal, XRG said, without disclosing financial details of the deal.

"This agreement marks an important milestone in XRG’s global growth strategy and builds on the strengthening relationship between the UAE and Turkmenistan,” Mohamed Al Aryani, president of international gas at XRG, said.

“It strengthens XRG’s presence in the Caspian region, expands our resource base, and reflects our ambition to be a reliable supplier of cleaner energy to meet the world’s evolving needs."

Block I, in the Caspian Sea, produces about 400 million cubic feet of natural gas per day, with opportunities to expand production capacity. The field has access to more than 7 trillion cubic feet of estimated natural gas resources.

The announcement is the latest in a string of deals signed by XRG, launched by Adnoc in 2024 to expand its operations globally.

Last year, the company bought a 10 per cent stake in the Area 4 concession in Mozambique's Rovuma Basin liquefied natural gas projects.

In December, XRG announced the acquisition of German chemicals company Covestro for an enterprise value of €14.7 billion ($15.3 billion) after its shareholders accepted a takeover offer.

XRG was launched with an enterprise value of more than $80 billion. It plans to double its asset value over the next decade, capitalising on energy transition, artificial intelligence advances and the rise of emerging economies.

XRG’s chemicals platform aims to become a top-five global player, producing and delivering chemical and speciality products to meet a projected 70 per cent increase in global demand by 2050, Adnoc said last year.

It is investing in natural gas projects to meet growing demand for the fuel and its supercooled form, liquefied natural gas.