Adnoc Buys Stake in NextDecade’s LNG Project in First U.S. M&A

Abu Dhabi National Oil Co. will take a 11.7% stake in phase 1 of the Rio Grande LNG project, according to a statement Monday. The deal also gives Adnoc 1.9 million tons a year of liquefied natural gas supply from the project’s future Train 4, according to the statement.

Adnoc has been looking for assets across the world as it seeks to expand its reach and access new markets. The company is in talks to buy a chemical company in Europe and is also looking to combine two units to create a $30 billion petrochemical giant. The UAE company’s push coincides with Saudi Aramco also seeking to boost in global presence, after agreeing to buy a LNG company in Australia.

The transaction “marks a significant milestone in Adnoc’s international growth strategy,” said Musabbeh Al Kaabi, executive director for international growth. “As global energy demand continues to increase, Adnoc is growing our diversified energy portfolio to ensure a secure, reliable and responsible supply of energy.”

Adnoc’s stake in the first phase of Rio Grande will give it access to the so-called Trains 1 to 3, which are parts of the project. NextDecade plans to make the final investment decision on building Train 4 in the second half of 2024.

The UAE, of which Abu Dhabi is the capital, is using its oil wealth to turn Adnoc into a global energy business. The country, and its Middle East neighbors including Saudi Arabia and Qatar, are also investing billions of dollars on gas — seen as an important bridge fuel in the shift energy transition.