ADNOC launches $80B low carbon energy company XRG: What we know
XRG, which will operate separately to ADNOC, is expected to double its asset value over the next decade.
Abu Dhabi National Oil Company (ADNOC) announced Wednesday that it is launching a new lower carbon energy and chemicals company called XRG, with a value of at least $80 billion, to capitalize on the growing demand for clean energy.
The new low carbon and energy investment firm will begin activities in the first quarter of 2025, according to a statement by the state-owned Emirati oil firm.
XRG, which will operate separately to ADNOC, aims to double its asset value over the next decade by capitalizing on the demand for clean energy in the global climate transition as well as artificial intelligence and the rise of emerging economies, the statement said.
The new company will kick off with three platforms: Global Chemicals, International Gas and Low Carbon Energies.
Global Chemicals aims to be a top five global chemicals player to meet the projected 70% increase in demand for chemicals by 2050, ADNOC said.
Low Carbon Energies will invest in cleaner energy such as low carbon ammonia, which ADNOC expects to grow by 70-90 million metric tons per annum by 2040, from close to zero now.
Although not as low carbon as green energy such as solar or hydropower, ADNOC has increased its investments in gas, including overseas in the United States and Mozambique, as it is seen as a cleaner fuel than oil. XRG International Gas "will build a world-scale integrated gas portfolio to help meet the anticipated 15% increase in global natural gas demand over the next decade, as a lower carbon transition fuel, as well as meet the expected 65% increase in demand for LNG [liquefied natural gas] by 2050," according to ADNOC.
Sultan Al Jaber, ADNOC’s managing director and group CEO, said that XRG “marks a bold new chapter” for ADNOC and that the new venture will be focused on “reinforcing Abu Dhabi and the UAE’s role as a global energy and chemicals leader."
However, despite the announcement of the lower carbon energy company, ADNOC has been expanding its crude oil production capacity, increasing it in May to 4.85 barrels per day from 4.65 barrels per day. ADNOC, which sells most of the United Arab Emirates’ crude, has a production capacity of more than 4 million barrels of oil per day and 11.5 billion cubic feet of natural gas per day.
The company’s publicly available financial results do not disclose what percentage of revenues come from different energy types.
