Thousands of kilometres from Abu Dhabi, beneath the waters of the Caspian Sea, lies a gas field whose future is partly being shaped by the UAE.
The gas will not be coming to the Emirates.
Instead, an Abu Dhabi company is helping bring it to customers in Azerbaijan and Türkiye, turning decades of experience in the energy industry into an investment far beyond home.
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The company is XRG, Adnoc’s international investment arm, and the field is Absheron, around 100 kilometres off Azerbaijan’s coast.
Together with its international partners, XRG is preparing to expand production, with future buyers already secured and an investment in a network of pipelines connecting the Caspian region with markets across Europe.
The project brings together several parts of the energy business, from developing resources beneath the seabed to arranging how the gas will reach its customers. Each involves different companies, infrastructure and commercial agreements.
“The Caspian shows our strategy in action,” Ali Al Hammadi, Asset Management Manager for International Gas at XRG, told Khaleej Times.
“A gas field becomes a business when you can deliver its gas to customers who need it.”
From the seabed to the buyer
The story began in August 2023, when Adnoc agreed to acquire a 30 per cent interest in Absheron, joining Azerbaijan’s state energy company Socar and France’s TotalEnergies.
The offshore field began producing gas that year, initially supplying Azerbaijan’s domestic market. Its development is now entering a considerably larger phase.
In September, the partners approved an expansion expected to increase production from 150 million to 600 million cubic feet of gas per day, with operations targeted to begin in 2029.
Much of the commercial groundwork was already in place. Türkiye’s state energy company Botas had signed a long-term agreement to purchase gas from the development.
Transporting gas from Azerbaijan to international markets involves another extensive infrastructure network.
The Southern Gas Corridor stretches approximately 3,500 kilometres, connecting Azerbaijan to Türkiye and onwards to southern Europe. Its pipelines cross Georgia, Türkiye, Greece and Albania, before continuing beneath the Adriatic Sea to Italy.
XRG completed the acquisition of a 12.5 per cent stake in Southern Gas Corridor CJSC in September, adding an investment in the region’s gas transportation infrastructure to its existing interest in Absheron.
While Absheron’s expanded production is intended to supply Azerbaijan and Türkiye, the wider corridor connects Azerbaijani gas resources with European markets. That network has gained importance as European countries have sought to diversify their natural gas supplies in recent years.
The investments give XRG interests in different parts of Azerbaijan’s energy industry, from the offshore resources being developed to the infrastructure connecting gas producers with customers across borders.
UAE expertise beyond its borders
XRG was established by Adnoc in November 2024 to expand its international activities across gas, chemicals and energy solutions. Its investments in Azerbaijan are among the projects through which the Abu Dhabi-headquartered company is developing that portfolio.
The work draws on expertise accumulated through decades of oil and gas development in the UAE, including managing large energy projects, working with international partners and making long-term investment decisions.
According to XRG, buying an interest in an overseas asset is only one part of that work. The company remains involved with its partners in reviewing how projects are developed, their costs and the commercial arrangements supporting future operations.
Al Hammadi works in international gas asset management, an area involving the oversight of investments and their development alongside operating partners. His role is a central example on how experience developed in the UAE is being applied to energy projects involving different countries, companies and markets.
The exchange also extends to Emirati professionals working on international assets. Overseas projects offer experience in different commercial environments and opportunities to work with foreign partners, while bringing that knowledge back into the UAE’s energy sector.
“Investing abroad complements the work continuing at home,” Al Hammadi said. “We want to turn UAE expertise into businesses that create lasting value for the country, while building skills and partnerships for the future.”
XRG’s international activities have continued to expand, including into neighbouring Turkmenistan, where it has acquired an interest in an offshore gas concession.
In Azerbaijan, attention now turns to Absheron’s next development phase. The planned increase in production in 2029 will bring more gas to regional customers, following years of investment, construction and agreements between the partners.
The project also represents a further step in the UAE’s overseas energy investments, where expertise built through developing resources at home is now being applied to projects far beyond its shores.
Source: Khaleej Times