Adnoc’s XRG Secures 11.7% Stake in US Rio Grande LNG Project
<p><strong>Dubai:</strong> In a significant move that strengthens the UAE’s presence in the global energy market, Adnoc’s international gas subsidiary <strong>XRG P.J.S.C.</strong> has finalized the acquisition of an <strong>11.7% equity stake in Phase 1 of the Rio Grande LNG project</strong> in Brownsville, Texas.</p><p>The deal, which was initially announced in <strong>May 2024</strong>, marks <strong>XRG’s first-ever gas infrastructure investment in the United States</strong>. It was completed through an investment vehicle managed by <strong>Global Infrastructure Partners (GIP)</strong>—a BlackRock-owned entity—by acquiring a portion of GIP’s existing stake.</p><h4>Strategic Expansion into the US</h4><p>Adnoc launched XRG in late 2024 as a lower-carbon energy and chemicals investment company with an enterprise value of over <strong>$80 billion</strong>. The unit has been tasked with expanding Adnoc’s international gas and chemicals portfolio, with a focus on high-growth markets.</p><p>By entering the US LNG sector—widely considered one of the most dynamic and competitive globally—XRG has positioned itself at the heart of a key growth area. The Rio Grande LNG project is expected to play an increasingly important role as the United States cements its position as a <strong>top global LNG exporter</strong>.</p><h4>Details of the Rio Grande LNG Project</h4><p>Phase 1 of Rio Grande LNG currently includes <strong>three liquefaction trains under construction</strong>. Earlier this month, developers reached a <strong>Final Investment Decision (FID)</strong> for a <strong>fourth train</strong>, expanding the project’s potential.</p><p>Once complete, the facility is projected to have a <strong>total production capacity of up to 48 million tons per annum (mtpa)</strong> of liquefied natural gas, making it one of the largest such facilities in North America.</p><p>At peak construction, more than <strong>5,000 workers</strong> are expected to be employed, with an additional <strong>350–400 long-term operational jobs</strong> created once the site becomes fully functional.</p><h4>Long-Term LNG Outlook</h4><p>The acquisition aligns with Adnoc’s view that <strong>global LNG demand will continue to rise</strong>. According to <strong>Mohamed Al Aryani, President of XRG International Gas</strong>, demand for LNG is projected to <strong>grow by 60% by 2050</strong>, fueled by industrial expansion, artificial intelligence (AI) adoption, and global economic activity.</p><p>Al Aryani emphasized that the deal underscores XRG’s <strong>disciplined, long-term investment approach</strong>, adding that it not only secures valuable LNG resources but also diversifies Adnoc’s international footprint in a market that is expected to remain central to global energy security.</p><h4>Offtake Agreement for Long-Term Supply</h4><p>In parallel with the equity acquisition, Adnoc has also signed a <strong>20-year offtake agreement</strong> for <strong>1.9 mtpa of LNG</strong> from Rio Grande’s fourth train. This supply agreement further cements the UAE’s position as a <strong>reliable global energy partner</strong>, ensuring long-term participation in the trans-Atlantic LNG trade.</p><p>The dual investment and offtake arrangement reflects a strategy to balance financial returns with guaranteed energy flows, while hedging against volatility in global supply chains.</p><h4>Adnoc’s Expanding Global Gas Business</h4><p>XRG, which is wholly owned by Adnoc, has already established gas and chemicals investments across the <strong>Caspian region, Africa, and the Americas</strong>. Its mandate is to build a competitive global gas business that aligns with Adnoc’s long-term vision of becoming a leading provider of both traditional and lower-carbon energy solutions.</p><p>The Rio Grande investment also complements Adnoc’s domestic strategy, where it has been expanding LNG capacity through projects such as <strong>Ruways LNG in the UAE</strong>. Together, these moves highlight a dual focus: meeting rising demand at home while capturing opportunities in fast-growing international markets.</p><h4>A Step Toward Global Energy Leadership</h4><p>Industry experts note that the investment reflects Abu Dhabi’s strategy of leveraging its financial strength and partnerships to build a diversified global portfolio in the energy sector. With LNG expected to play a critical role in the transition to lower-carbon energy systems, Adnoc’s involvement in projects like Rio Grande is seen as both a commercial and strategic move.</p><p>As the project progresses, XRG’s stake ensures Abu Dhabi remains at the forefront of the evolving global energy landscape, contributing not just capital but also reinforcing the emirate’s position as a hub for <strong>innovation, investment, and long-term energy security</strong>.</p><h3>Conclusion</h3><p>By securing a significant stake in the <strong>Rio Grande LNG project</strong>, Adnoc’s XRG has taken a bold step into the US energy market. The deal not only strengthens the UAE’s position in the global LNG supply chain but also underscores its long-term commitment to ensuring reliable, lower-carbon energy for the world.</p>