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XRG now has capital committed at both ends of Azerbaijan’s gas chain: Adnoc’s investment arm XRG, TotalEnergies, and Azerbaijan’s Socar took the final investment decision (FID) on the full-field development of the offshore Absheron gas and condensate field, XRG said in a statement. The expansion will quadruple the field's gas output, from the 1.5 bcm a year the first phase has produced since 2023 to 6 bcm, alongside 47k barrels per day of condensate, according to TotalEnergies. Startup is slated for 2029. 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.
Who owns what? 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 then expected in July. Adnoc had also signed an agreement in June to take gas from Absheron once the expanded project comes online.
Why it matters: Absheron's gas will supply Azerbaijan's domestic market and be exported to Turkey through the existing network that connects the country to European markets, which is the system XRG just bought into. XRG's corridor stake is a minority one with no control over flows or capacity, but it now earns on both the molecules and the route that carries them west.
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, has agreed to take 32% of three upstream blocks in Argentina's Vaca Muerta pending regulatory approval, and is now evaluating a potential investment in Shell-backed LNG Canada.
