XRG, Adnoc's international energy investment unit, is to boost its gas portfolio with plans for the next phase of its strategic field development in Azerbaijan.
The final investment decision for the Absheron offshore gas and condensate field development, where XRG holds a 30 per cent stake, was made alongside Azerbaijan's state oil company Socar and France's TotalEnergies, XRG said in a statement on Saturday.
XRG's acquisition of the stake was first announced in 2023. Socar and TotalEnergies each have a 35 per cent holding in the venture.
The XRG announcement was made during the Azerbaijan International Investment Forum in the capital Baku. The company did not disclose the value of investments involved.
The Caspian Sea field, where production is projected to begin in 2029, is expected to produce up to 600 million cubic feet (17 million cubic metres) of gas and 47,000 barrels of condensate a day, it said. Recoverable gas resources at Absheron are pegged at up to five trillion cubic feet.
Mohamed Al Aryani, president of XRG's international gas unit, said Azerbaijan had been able to boost its position as a "critical bridge" between Caspian resources and international markets.
"The decision marks an important step forward for XRG and reinforces Azerbaijan's role as a trusted energy partner to international markets," he said. "We are investing in world-class resources and infrastructure that support energy security, create economic value and drive long-term growth."
XRG has been actively increasing its portfolio of investments globally and plans to double its asset value over the next decade.
Launched in 2024 as an international lower-carbon energy and chemicals investment company, with an enterprise value exceeding $80 billion, it has acquired stakes in several global gas projects.
XRG, along with Adnoc and Masdar, this month announced agreements with German companies covering liquefied natural gas, renewable energy, advanced materials and technology. Last month, XRG entered Venezuela's energy sector through an offshore natural gas project alongside global oil company BP and Qatar’s UCC Holding.
In June, XRG and Italy's Eni signed agreements with Argentina’s YPF to acquire stakes in three upstream blocks to supply a new LNG project in the South American nation. In January, XRG said it increased its stake in the Rio Grande LNG project in the US by 7.6 per cent to build its portfolio.
Azerbaijan, meanwhile, has the world's 20th-biggest gas reserves at nearly 1.7 trillion cubic metres, which is less than one per cent of the global total, data compiled by Worldometer shows.
Energy products comprise nearly 90 per cent of Azerbaijan’s total exports. Italy is its top export destination, with its other top trading partners including Germany, India and the UK.
Azerbaijan’s oil and gas sector offers a solid foundation for expansion into downstream petrochemicals and advanced materials, including refined petroleum products, polymers and specialty chemicals.
The country's geographical position – between the Caspian Sea, Central Asia, the Middle East and Europe – enables the development of a full-service energy trading hub, analysts at consultancy Oliver Wyman said.
Investments in infrastructure, including roads, railways, water supply systems, electricity networks, schools, hospitals and irrigation, have also helped modernise the country's physical capital, the World Bank said.
"Through its investments in Absheron, the Southern Gas Corridor and wider Caspian opportunities, XRG is building a long-term platform for growth that supports Azerbaijan's energy ambitions while strengthening regional energy security and advancing its international gas growth strategy," XRG said.
