XRG to acquire stake in Southern Gas Corridor, expanding Caspian presence

XRG, the international energy investment platform launched by Abu Dhabi National Oil Co. (ADNOC) in 2024, has 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 agreement, announced on the sidelines of ADIPEC 2025 in Abu Dhabi, marks another milestone in strengthening energy cooperation between the United Arab Emirates and Azerbaijan.

SGC, founded in 2014, is an Azerbaijani energy holding company whose assets include producing gas fields and a 3,500 km pipeline network stretching from the Caspian Sea through Türkiye to southern Europe. The system has the capacity to deliver up to 26 billion cubic meters of natural gas per year, playing a key role in meeting Europe’s energy demand and diversifying the continent’s sources of supply.

The agreement was signed 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 agreement underscores our shared commitment to advancing reliable and sustainable energy partnerships that benefit both nations and contribute to global energy security,” Dr. Al Jaber said during the signing ceremony. “It also reinforces the UAE’s growing role as an international partner in supporting stable energy flows from the Caspian to Europe.”

Jabbarov noted that the partnership represents another step forward in Azerbaijan’s strategic cooperation with the UAE. “We value XRG’s expanding presence in the region and its commitment to developing long-term partnerships that strengthen our mutual economic and energy interests,” he said.

Expanding Caspian strategy

The potential acquisition would broaden XRG’s existing collaboration with the State Oil Co. of the Azerbaijan Republic (SOCAR) beyond upstream production into midstream infrastructure and gas delivery to European markets. XRG currently holds a 30% stake in the Absheron gas and condensate field in partnership with SOCAR and a 38% interest in Turkmenistan’s offshore Block I gas concession.

The deal follows a reciprocal investment earlier in 2024, when SOCAR acquired a 3% stake in the SARB and Umm Lulu concession in Abu Dhabi from ADNOC — a move that further linked the UAE and Azerbaijan’s upstream portfolios.

Strengthening regional and European supply chains

Through its ownership of strategic assets such as the Shah Deniz field, the South Caucasus Pipeline, the Trans Anatolian Pipeline (TANAP), and the Trans Adriatic Pipeline (TAP), Southern Gas Corridor CJSC is central to the reliable flow of Caspian gas to Europe. These projects have become a cornerstone of the European Union’s efforts to diversify natural gas supplies away from single-source dependence.

The proposed partnership with XRG aligns with that objective by reinforcing regional cooperation and supporting continued investment in safe, efficient, and sustainable energy transport from the Caspian basin to European markets.

Southern Gas Corridor CJSC is jointly owned by the Ministry of Economy of the Republic of Azerbaijan and SOCAR. Its portfolio also includes a shareholding in Azerbaijan Gas Supply Co. Ltd., which markets gas volumes from the Shah Deniz project to downstream consumers across the region.