What Is XRG? Inside Abu Dhabi's $150-Billion Bet On Energy, Chemicals And AI

(MENAFN- Khaleej Times) XRG is still a relatively new name in Abu Dhabi. Adnoc launched XRG in November 2024 with an enterprise value of more than $80 billion and a mandate to accelerate its international expansion. Today, XRG describes itself as Adnoc's international investment company and says its valuation exceeds $150 billion, with investments across natural gas, chemicals and energy solutions.

What is less obvious is why those businesses belong together. A gas project in the US, an ammonia producer, a German advanced-materials company and investments in energy infrastructure can initially look like separate bets on separate industries. Mohamed Al Aryani, President of International Gas at XRG, says the company looks at them as different parts of a much longer chain.

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“People often look at our portfolio and see a gas asset in one market, a chemicals business in another, and energy infrastructure somewhere else. We look at it differently,” Al Aryani told Khaleej Times.“What connects them is a very simple question: How will the world produce, move and use energy and materials over the next 20 or 30 years and beyond?”

Stay up to date with the latest news. Follow KT on WhatsApp Channels. From one molecule to an everyday product

Ammonia is one way of understanding what he means. Most people associate it, if at all, with fertiliser. Fertiglobe, majority owned through XRG, produces ammonia and urea used in agriculture. Covestro, the German advanced-materials company acquired by XRG last year, also uses ammonia as a raw material in chemical manufacturing.

Those chemicals eventually become materials used in insulation, furniture, cars and other products far removed from the original molecule.

“The phrase we often use is 'from molecule to customer',” Al Aryani said.“We are not interested in owning isolated assets. We are interested in building positions across the value chain where the pieces strengthen one another.”

There are already early attempts to test whether those links can work in practice.

In February, Covestro, Fertiglobe and Abu Dhabi chemicals company Ta'ziz signed a memorandum of understanding to explore ammonia supplies from Fertiglobe to Covestro sites in China and the US, alongside longer-term options for Europe and wider cooperation in the UAE.

A few months later, Covestro said it had begun a feasibility study for a possible new MDI production facility in the UAE. MDI is used to make rigid polyurethane foam, commonly found in building and appliance insulation. The study is examining whether a plant could benefit from the existing partnership with Fertiglobe and Ta'ziz.

Why AI suddenly matters to an energy company

Artificial intelligence may appear far removed from fertiliser or natural gas. For XRG, the connection starts with what sits behind the screen.“For most people, AI is a technology story. For us, it's also an energy story,” Al Aryani said.

“Every new data centre requires electricity. It requires infrastructure. It requires cooling systems. It requires advanced materials. When you scale that globally, the impact becomes very significant.” he said

A user asking an AI chatbot a question sees software. Somewhere behind that answer are servers inside a data centre that must be powered and cooled, connected to the electricity grid and housed inside a physical building.

According to the International Energy Agency, data centres consumed about 485 terawatt-hours of electricity globally in 2025. Its current base case sees that roughly doubling to 950TWh by 2030, when data centres would account for around three per cent of global electricity demand. Electricity consumption from AI-focused data centres is projected to triple over the same period.

Those are forecasts, and the IEA itself points to significant uncertainty. Grid connections, shortages of transformers and gas turbines, chip supply and the economics of AI investment could all constrain the pace of data-centre construction. At the same time, the amount of electricity required for individual AI tasks is falling as computing becomes more efficient.

Nor does increased AI use translate directly into increased natural gas consumption. The IEA expects renewables to provide nearly half of the additional electricity needed by data centres over the coming years, with natural gas, nuclear and other sources also contributing.

XRG's thesis is broader than a bet on one source of power. If digital infrastructure continues expanding, more electricity will need to be generated and moved, while more data centres, cooling systems and physical infrastructure will have to be built.

Gas remains a major part of that strategy. XRG is targeting 20 to 25 million tonnes a year of gas and LNG capacity by 2035. In the US, it now holds interests across all five LNG trains under construction at the Rio Grande LNG project in Texas, according to the company.

So is XRG simply buying everything that might grow?

Al Aryani says the answer is no.“We start by understanding where we believe long-term demand is headed, but identifying growth markets is only the beginning,” he said.

The company says potential investments are tested against expected returns, whether they strengthen an existing business, the quality of the asset and whether it has capabilities or positions that are difficult to reproduce.

“And finally, we ask a simple question: Can we create more value through ownership than the business could on its own?” That is an important distinction. We are not simply assembling a portfolio of investments. We are building platforms and ecosystems across gas, chemicals and energy solutions that can benefit from scale, connectivity and shared capabilities." he said

"For us, it is never just about whether an asset is available or attractively priced The real question is whether it advances our strategy, strengthens our competitive position and creates value over the long term. If the answer is yes, we will lean in. If not, we are very comfortable walking away.” he said

What does Abu Dhabi get back?

For a UAE reader, there is another question behind XRG's international expansion: what does owning businesses and assets overseas eventually bring back home?

Al Aryani argues that the benefit should extend beyond investment returns.

“As we grow internationally, we bring capital, technology, partnerships and expertise back into our ecosystem,” he said.“That strengthens our industrial base, creates opportunities for UAE businesses and deepens our connectivity to global markets.”

Covestro's UAE feasibility study offers an early example of what that could mean. If a plant is eventually approved, it could create a direct industrial link between an international company acquired by XRG and the chemicals and infrastructure already being developed in Abu Dhabi.

XRG is making a long-term bet that growing populations, industry and AI will require more energy, infrastructure and materials. The more immediate test is whether the portfolio it is assembling can turn those separate investments into working commercial links, and whether some of that value ultimately finds its way back to the UAE.

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