This investment is set to bolster EU energy security, reinforce UAE-Azerbaijan cooperation, and significantly expand XRG’s presence in the vital Caspian energy region.
XRG, the international energy investment platform launched by the Abu Dhabi National Oil Company (ADNOC) in November 2024, has announced a significant strategic move to expand its presence in the Caspian region and enhance European energy security. The platform signed non-binding Heads of Terms to acquire a stake in Southern Gas Corridor CJSC (SGC) from the Ministry of Economy of the Republic of Azerbaijan.
The landmark agreement was signed on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), marking a major milestone in the rapidly developing strategic energy partnership between the United Arab Emirates (UAE) and Azerbaijan. The signing ceremony saw the participation of key entities including the Azerbaijan Investment Holding (AIH) and the State Oil Company of the Republic of Azerbaijan (SOCAR).
The investment in SGC is directly aligned with XRG’s regional strategy and offers substantial support to the European Union's energy security objectives. SGC is the core entity responsible for the delivery of crucial natural gas resources from the Azerbaijani sector of the Caspian Sea directly to the European market. SGC’s assets are considerable, encompassing operating natural gas producing assets and a vast 3,500km pipeline network that runs from the Caspian, through Türkiye, and into southern Europe. This network currently possesses the capacity to deliver up to 26 billion cubic meters per annum (BCMA) of gas.
The agreement holds mutual benefits, promising to contribute meaningfully to Azerbaijan’s ongoing economic growth while simultaneously reinforcing the country’s pivotal role as a stable and reliable energy partner on the international stage.
The Heads of Terms were formally executed by H.E. Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Executive Chairman and CEO of XRG, and H.E. Mikayil Jabbarov, Minister of Economy of the Republic of Azerbaijan and Chairman of SOCAR’s Supervisory Board.
This move reinforces the deepening cooperation between the UAE and Azerbaijan in strategic energy projects, building on a foundation designed to strengthen economic ties between the two nations. The deal has the potential to expand XRG’s existing collaboration with SOCAR, moving beyond gas production into the reliable delivery of energy resources to European markets seeking critical source diversification.
XRG's existing footprint in the Caspian region includes a partnership with SOCAR in the Absheron gas and condensate field, where it holds a 30% stake. XRG also maintains a 38% interest in the offshore Block I gas concession in Turkmenistan.
