ADNOC’s XRG widens gas and LNG portfolio with Argentina and Caspian Sea deals

February 12, 2026, by Melisa Cavcic

XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC), which includes Abu Dhabi Development Holding Company (ADQ) and global investment firm Carlyle, has taken steps to expand its footprint by firming up agreements to come aboard a proposed liquefied natural gas (LNG) project in Sierra Grande Norte, on Argentina’s Atlantic coast, and Southern Gas Corridor (SGC) CJSC, which delivers gas resources from the Azerbaijani sector of the Caspian Sea to the European market.

Rendering of Argentina LNG project; Source: YPF

XRG has confirmed the signing of a joint development agreement with YPF and Eni to advance the Argentina LNG (ARGLNG) large-scale project designed to develop 12 million tons per year (mtpa) of LNG capacity and support Argentina’s emergence as a long-term global LNG supplier.

This comes months after the trio inked a non-binding agreement for the integrated upstream and midstream gas project designed to develop the resources of the onshore Vaca Muerta field and serve international markets. The development is expected to export up to 30 million tonnes of LNG per year in various independent phases by 2030.

The $50 billion Argentina LNG project entails gas production, processing, transportation, and liquefaction for export through two floating gas liquefaction units (FLNG) with a capacity of 6 mtpa, equivalent to approximately 9 billion cubic meters of gas per year for each, as well as the valorisation and export of associated liquids.

Golar LNG’s MKII FLNG unit, chartered for the project, will work in the Gulf of San Matías, offshore Argentina, where it will operate in proximity to the FLNG Hilli. Phase 2 encapsulates the construction of a 10 mtpa onshore modular liquefaction plant, which is expected to be enlarged with two trains as part of Phase 3 to reach up to 30 mtpa.

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Following its first strategic U.S. investment, which enabled it to get an interest in Phase 1 of NextDecade Corporation’s Rio Grande LNG project in Texas, XRG signed a non-binding heads of terms in November 2025 to obtain an interest in Southern Gas Corridor CJSC (SGC). The firm has now inked a sales and purchase agreement (SPA) with the Ministry of Economy of the Republic of Azerbaijan to acquire an equity stake in SGC.

The completion of the deal is subject to satisfaction of conditions precedent, including customary regulatory approvals. The ADNOC-led player’s investment in SGC is seen as a significant step forward in the growing partnership between the UAE and Azerbaijan, advancing shared objectives to strengthen regional energy security, deepen economic cooperation, and develop strategic international energy infrastructure.

The SPA agreement was signed in the presence of Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates (UAE), and Ilham Aliyev, President of the Republic of Azerbaijan, between Dr. Sultan Al Jaber, Executive Chair of XRG, and Mikayil Jabbarov, Minister of Economy of the Republic of Azerbaijan, Chairman of the Supervisory Board of SOCAR.

The Southern Gas Corridor value chain is perceived to be a key export network supplying natural gas resources from the Azerbaijani sector of the Caspian Sea to the markets in Azerbaijan, Georgia, Türkiye and Europe through the South Caucasus Pipeline (SCP), the Trans Anatolian Pipeline (TANAP), and the Trans Adriatic Pipeline (TAP).

This integrated network is believed to enhance the reliability and diversification of Europe’s energy supplies while reinforcing Azerbaijan’s role as a long-term and trusted energy partner.

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Jabbarov noted: “This agreement reinstates Azerbaijan’s role as a trusted energy partner to international markets and supports our long-term vision for sustainable economic development in collaboration with our strategic partners. Together with our partners, we are building the foundations for enhanced regional connectivity and future growth.”

SGC encompasses natural gas production assets and a 3,500km pipeline network from the Azerbaijani sector of the Caspian Sea, through Georgia and Türkiye to Southern Europe, with the current capacity to deliver up to 26 billion cubic meters of natural gas per annum.

Dr. Al Jaber commented: “The Southern Gas Corridor is a vital energy link that supports stability, economic growth and energy security and it strengthens our commitment to investing in high quality, long-term infrastructure that delivers lasting value and global progress.”