ADNOC Forms $80B Investment Firm to Grow Gas, Chemicals, Low-Carbon Assets

Abu Dhabi National Oil Co. (ADNOC) said Wednesday it has created a new investment company to expand the United Arab Emirates’ share of the global chemical, low-carbon energy and natural gas markets.

With an enterprise value of over $80 billion, XRG will start activities in the first quarter of 2025, ADNOC said in an online statement.

In the chemicals sector, XRG aims to be among the globe’s top five players. The targeted portfolio will produce and deliver chemical and specialty products to help meet the projected 70 percent rise in global demand by 2050, ADNOC said.

On October 1 ADNOC secured a deal to potentially take over German chemicals producer Covestro AG with a share acquisition offer of about EUR 11.7 billion ($12.33 billion).

Meanwhile XRG’s gas platform “will build a world-scale integrated gas portfolio to help meet the anticipated 15 percent increase in global natural gas demand over the next decade, as a lower carbon transition fuel, as well as meet the expected 65 percent increase in demand for LNG by 2050”, the statement said.

ADNOC’s integrated gas processing company, ADNOC Gas, earlier announced a goal to complete three projects between 2025 and 2029, including the Big Oil-backed Ruwais LNG. Targeted to start production 2028, the 9.6 million tons per annum (MMtpa) facility would more than double ADNOC’s LNG output. The other two are the Maximization of Ethane Recovery and Monetization Project, which is planned to produce up to 3.4 MMtpa of ethane and natural gas liquids, and the IGD-E2 project, designed to have a gas processing capacity of 370 million cubic feet per day.

A third platform under XRG “will invest in the solutions needed to meet increasing demand for low carbon energies and decarbonization technologies to drive economic growth through the energy transition”, ADNOC stated. “The market for low carbon ammonia alone is expected to grow by between 70-90 million tonnes per annum by 2040, from close to zero now”.

ADNOC recently completed the takeover of its joint venture Fertiglobe PLC, a global fertilizer major, from OCI Global for AED 13.28 billion ($3.62 billion). ADNOC raised its stake to 86.2 percent with the 50-percent-plus-one-share acquisition from Amsterdam-based OCI. The other equity of 13.8 percent remains on free float on the Abu Dhabi Securities Exchange.

ADNOC said in a press release October 15 announcing the completion that it is now putting all its ammonia portfolio, including two projects at home, under Fertiglobe.

ADNOC added about the new investment company, “XRG aims to more than double its asset value over the next decade by capitalizing on demand for low-carbon energy and chemicals driven by three megatrends: the transformation of energy, exponential growth of AI, and the rise of emerging economies”.

Managing director and chief executive Sultan Ahmed Al Jaber said, “Building on our unrivaled track record in energy and investments, network of global partners, and strategic market access, XRG will drive sustainable economic growth, foster technological innovation, and deliver the energy and products needed to improve lives around the world”.

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