Abu Dhabi’s state oil company Adnoc has increased its stake in the Rio Grande liquefied natural gas project in Texas, as it seeks to expand in the US and become one of the world’s largest integrated gas suppliers.
XRG, the overseas investment arm of Adnoc, said on Monday it had bought a 7.6 per cent equity interest in the second phase of Rio Grande from Global Infrastructure Partners (Gip), a division of the world’s largest asset manager BlackRock.
Rio Grande is being developed by NextDecade, a US LNG company, with financial backing from Gip, XRG, TotalEnergies and several other partners. Construction on the first phase of the project in Brownsville, Texas, began in 2023 and is anticipated to begin production in 2027. Phase 2 is likely to be substantially complete by 2031, according to NextDecade.
XRG did not disclose the acquisition price for the stake in phase 2, which will build two trains capable of processing about 12mn tonnes of LNG per year. NextDecade forecasts this will cost just over $13bn.
The deal follows XRG’s purchase in September 2024 of an 11.7 per cent stake in the first phase of Rio Grande which, when all phases are complete, is expected to be one of the world’s largest LNG facilities with capacity to ship up to 60mn tonnes of the super-chilled fuel per year.
“By growing our presence in US LNG, we are strengthening a resilient, globally scaled gas platform while further deepening the UAE — US energy partnership — supporting energy security, jobs and investment-driven growth,” said Mohamed Al Aryani, president of XRG’s international gas business.
XRG’s latest investment in Rio Grande comes as investors have become more bearish on LNG developers owing to concerns about a looming supply glut caused by the rapid expansion of facilities in the US and Qatar. Shares in NextDecade have fallen by just over 50 per cent in the past six months, as numerous energy forecasters have warned prices are set to fall.
XRG was created by Adnoc in November 2024 as an $80bn vehicle to buy up international gas, chemicals and low-carbon energy businesses. It aims to become a top-five integrated global gas and LNG business, targeting 20mn-25mn tonnes per year of capacity by 2035.
Middle Eastern energy groups have stepped up activity in the US over the past two years, as they build a presence in the world’s largest LNG export nation and respond to Donald Trump’s call for increased foreign investment. The White House said in March that the UAE had committed to invest $1.4tn in the US over a decade following meetings in Washington between senior UAE and US officials and a dinner with vice-president JD Vance.
In April, Mubadala Energy, owned by Abu Dhabi sovereign investor Mubadala, said it would buy a 24.1 per cent stake in energy-focused asset manager Kimmeridge’s shale gas production business in Texas and its Commonwealth liquefied natural gas export terminal in Louisiana.
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