Adnoc’s global investment arm XRG inked a sales and purchase agreement to acquire an equity stake in Southern Gas Corridor (SGC) from Azerbaijan’s Economy Ministry, subject to customary regulatory and antitrust approvals, state news agency Wam reports. The size and value of the stake weren’t disclosed.

SGC? SGC is a USD 40 bn project that is currently owned by Azerbaijan’s Economy Ministry and its state oil company, Socar. Established in 2014, it currently spans a 3.5k km natural gas pipeline and operates gas fields that reach from the central Asian country to Italy, with the capacity to transport up to 26 bcm of natural gas per year.

The transaction gives XRG exposure to a gas export system linking the Caspian region to Europe. The integrated Southern Gas Corridor value chain includes the South Caucasus Pipeline, the Trans Anatolian Pipeline, and the Trans Adriatic Pipeline, which transport natural gas from Azerbaijan through Georgia and Turkey to European markets.

The transaction expands the company’s footprint in the Caspian region and builds on its existing 30% stake in the Absheron gas field alongside Socar, and 38% stake in Turkmenistan’s offshore Block I concession.

We knew this was coming: XRG inked a non-binding preliminary agreement to purchase an undisclosed stake in SGC last November.

The bigger picture: Adnoc’s international arm has been making a wider push into LNG assets across Asia, the US, and Latin America, with recent moves including an 11.7% stake in the USD 18 bn Rio Grande LNG export facility in Texas. It is also eyeing an investment in an Argentinian LNG project.

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