Abu Dhabi-based XRG has finalized its first gas investment in the U.S. by acquiring an 11.7% equity stake in Phase 1 of the Rio Grande LNG project in Texas.
In a significant move to expand its international energy footprint, XRG P.J.S.C. announced today the completion of its acquisition of an 11.7% equity stake in Phase 1 of the Rio Grande LNG project located in Brownsville, Texas. This transaction represents XRG's first-ever gas investment in the United States and is a strategic joint venture with Global Infrastructure Partners (GIP), a subsidiary of BlackRock. The deal, which was initially announced in May 2024, underscores XRG's long-term investment plans and its commitment to meeting the escalating global demand for natural gas.
The Rio Grande LNG project is one of the most ambitious liquefied natural gas (LNG) export infrastructure developments in the U.S. and is positioned to be a major player in the global energy market. The project has an immense potential liquefaction capacity of approximately 48 million tons per annum (mtpa), with Trains 1-3 currently under construction. In a testament to the project's momentum, the Final Investment Decision (FID) for Train 4 was reached earlier this month, signaling robust and continued development.
Mohamed Al Aryani, XRG International Gas President, commented on the strategic importance of the acquisition. "As LNG demand is projected to grow by 60% by 2050, the investment in Rio Grande LNG advances XRG’s strategy to build a leading global gas and LNG business," he stated. He emphasized the increasing need for reliable energy to support industrial growth, the proliferation of AI, and broader economic expansion. Al Aryani also highlighted the company's commitment to creating shared value for all stakeholders, with a geographically diverse international portfolio that spans the Caspian region, Africa, and the Americas.
This landmark investment not only strengthens XRG's international portfolio but also solidifies the company's long-term vision for the U.S. market. The project is expected to have a substantial economic impact, creating over 5,000 construction and trade jobs at its peak and providing 350-400 long-term operational jobs once the facility is in service. The acquisition was structured with XRG purchasing a portion of GIP's existing stake in the project through a GIP investment vehicle, demonstrating a collaborative approach to large-scale infrastructure development.
In a related but separate development, XRG's parent company, ADNOC, has also secured a long-term interest in the project's future output. ADNOC has entered into a 20-year LNG offtake agreement for 1.9 mtpa from Rio Grande LNG Train 4. This dual-pronged approach—combining equity investment with a long-term supply agreement—ensures that ADNOC and XRG are deeply embedded in the project's success.
