XRG doubles down on Azerbaijan gas with Absheron expansion and export-route exposure

XRG now has capital committed at both ends of Azerbaijan’s gas chain. Adnoc’s investment arm XRG, TotalEnergies, and Azerbaijan’s Socar have taken the final investment decision (FID) on the full-field development of the offshore Absheron gas and condensate field, XRG said in a statement. The FID comes less than two weeks after XRG closed its stake in the Southern Gas Corridor — the pipeline system that carries Azerbaijani gas to Europe. The expansion is due online in 2029 and will develop nearly 5 tcf of recoverable gas.

IN CONTEXT- TotalEnergies operates the project with a 35% stake. Socar holds another 35%, and XRG owns the remaining 30%.

We knew the Absheron expansion was coming — although the FID landed later than initially expected. In March, the second phase was targeting a 2029 startup, with an investment decision expected in July. Adnoc had also signed an agreement by June to take gas from Absheron once the expanded project comes online.

Why it matters: XRG’s corridor stake is a minority one and comes with no control over flows or capacity. It does give the company a position in the infrastructure alongside its Azerbaijani production, so XRG earns on the molecules and on the route that moves them.

Azerbaijan is one piece of a wider Caspian build-out. XRG holds 38% of Turkmenistan’s offshore block I concession, which produces nearly 400 mmcf/d of gas and sits on more than 7 tcf of resources.

Outside the Caspian, XRG has been spending across the Americas. It holds equity in all five trains of the Rio Grande LNG project in Texas and upstream interests in Argentina and is now evaluating a potential investment in Shell-backed LNG Canada.