XRG, the international energy investment platform launched by Abu Dhabi’s national oil company ADNOC, has completed the acquisition of a 12.5% stake in Southern Gas Corridor CJSC, the company that holds Azerbaijan’s interests in the gas supply chain linking the Caspian Sea to Europe, the UAE state news agency WAM said on Tuesday, 15 September.
The deal gives XRG indirect exposure to Shah Deniz and three interconnected pipelines running all the way to Italy: SCPX, TANAP and TAP. “By combining world-class gas resources in Azerbaijan and Turkmenistan with strategic export infrastructure, we are building a resilient platform,” said Mohamed Al Aryani, President of International Gas at XRG, adding that the network connects Caspian supply with growing regional and European demand.
The network stretches for around 3,500 km and can carry up to 26 billion cubic metres of gas a year. The sale and purchase agreement was signed on 31 January, before the transfer of the shares was completed on 14 September. XRG now owns 12.5% of Southern Gas Corridor, alongside SOCAR with 51% and the Azerbaijani state with 36.5%.
Three pipelines to Italy
The gas comes in part from Shah Deniz in the Caspian Sea before reaching the Sangachal terminal south of Baku.
It then travels through the South Caucasus Pipeline Expansion (SCPX) across Azerbaijan and Georgia, followed by the Trans-Anatolian Natural Gas Pipeline (TANAP) across Turkey. The Trans Adriatic Pipeline (TAP) takes over in Greece, crossing Albania and the Adriatic Sea before reaching southern Italy.
The three newly built sections, SCPX, TANAP and TAP, together account for more than 3,200 km of pipelines. Southern Gas Corridor also includes Azerbaijan’s interests in Shah Deniz and in the company responsible for marketing gas produced from the field.
TAP, which began commercial operations in late 2020, has already delivered more than 60 billion cubic metres of gas to Europe, including 50 billion to Italy. The corridor gives Caspian gas direct access to European markets without transiting Russia.
XRG already present in Azerbaijan
XRG already held a 30% stake in the Absheron gas and condensate field, also located in the Azerbaijani sector of the Caspian Sea. The Southern Gas Corridor acquisition adds export infrastructure to its existing upstream position.
Launched by ADNOC in 2024, XRG houses the group’s international investments in gas, chemicals and energy infrastructure.
Masdar expands solar investments
UAE investment in Azerbaijan extends beyond gas. Masdar, Abu Dhabi’s renewable energy company, and SOCAR Green reached financial close this week on the 315 MW Neftchala solar project.
Masdar is also exploring an expansion of at least 350 MW at Garadagh, together with up to 200 MWh of battery storage, as well as a 100 MW renewable energy project designed to provide round-the-clock power.
The announcements came during a visit to Baku by Sheikh Tahnoon bin Zayed Al Nahyan, Deputy Ruler of Abu Dhabi and the UAE’s National Security Adviser.