UAE’s XRG considers buying stake in LNG Canada

The Abu Dhabi National Oil Company’s (ADNOC) international investment arm XRG is believed to be seeking to purchase a stake in LNG Canada, Bloomberg reported on September 22.

Operator Shell, which holds a 40% interest in Canada’s flagship LNG facility, has been considering selling as much as 75% of its stake.

However, the world’s largest trader of the super-chilled fuel has also indicated in the past that it is "very comfortable" with stake. CEO Wael Sawan stated in April that it was "not necessarily looking at reducing” its equity interest, however it remained interested in generating cash from lower-return parts of its business and where it was not the natural owner.

The United Arab Emirates XRG would serve as a logical buyer, given the Gulf company’s goal to emerge as a top five global supplier of natural gas.

The company has been keen to increase its international footprint. In mid-September, XRG completed its acquisition from Azerbaijan's Ministry of Economy of an equity stake in Southern Gas Corridor Closed Joint Stock Company.

Also in mid-September, XRG inked a Memorandum of Understanding (MoU) with Germany’s state-run Securing Energy for Europe (SEFE) to explore wider cooperation across the natural gas and LNG value chain, as it targets increasing its footprint in Germany and other European markets. The agreement covers potential collaboration on gas and LNG supply, infrastructure, market development, shipping and portfolio optimisation.

Meanwhile, in August XRG announced that it had secured an interest in Venezuela's offshore Loran gas licence. In the same month, Brazil’s antitrust authority approved a joint venture involving Argentina’s YPF, Italy’s Eni and XRG for the Argentina LNG project, which was required because the transaction involved the companies’ activities within Brazil.

As XRG eyes a holding in LNG Canada, the company is believed to have been engaging in discussions with PetroChina for its stake in the project, sources familiar with the matter told Bloomberg speaking on condition of anonymity.

PetroChina holds a 15% stake in LNG Canada.