XRG, Adnoc's international energy investment platform, has signed a non-binding agreement to acquire a stake in Azerbaijan's Southern Gas Corridor (SGC) company amid growing ties between the two countries.
The heads of terms agreement was signed on Monday by Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Adnoc’s managing director and group chief executive, and chief executive of XRG, with Mikayil Jabbarov, Azerbaijan’s Minister of Economy and chairman of the State Oil Company of the Republic of Azerbaijan’s (Socar) supervisory board at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) on Monday.
The investment supports XRG’s regional strategy in the Caspian and will support the delivery of gas resources from Azerbaijan to the European market, the company said.
It also reinforces co-operation between the two countries in strategic energy projects, deepening their economic partnership.
SGC, established in 2014, is an Azerbaijani energy holding company owned by Azerbaijan’s Ministry of Economy and Socar. It operates natural gas-producing assets and a 3,500km pipeline network that runs from the Caspian through Turkey to southern Europe.
The network has the capacity to deliver up to 26 billion cubic metres of gas a year.
Its assets also include participating interests in the Shah Deniz gas and condensate field, the South Caucasus Pipeline, the Trans Anatolian Pipeline, the Trans Adriatic Pipeline, and shares in Azerbaijan Gas Supply Company.
XRG was launched last year as an international lower-carbon energy and chemicals investment company, with an enterprise value exceeding $80 billion.
The company has been actively increasing its operations globally and plans to double its asset value over the next decade, capitalising on the energy transition, artificial intelligence and the rise of emerging economies.
XRG’s existing holdings in the Caspian include a 30 per cent stake in the Absheron gas and condensate field in partnership with Socar, and a 38 per cent interest in the offshore Block I gas concession in Turkmenistan.
The latest agreement could expand XRG’s collaboration with Socar from gas production to delivery of energy resources to European markets seeking to diversify their supply, the company said. It also has the potential to contribute to Azerbaijan’s economic growth, XRG said.
