State-run Abu Dhabi National Oil Co. (ADNOC) is eyeing upstream and liquefied natural gas (LNG) opportunities in Canada through its newly formed XRG arm, a senior executive said on Tuesday. The move marks a potential expansion of the UAE's energy giant into North American markets, leveraging Canada's vast natural resources and growing LNG export capacity.
Strategic Expansion
The executive, speaking on condition of anonymity, confirmed that ADNOC's XRG unit has been actively evaluating Canadian assets, including potential partnerships and acquisitions in the upstream sector and LNG infrastructure. Canada, with its large oil sands deposits and emerging LNG projects on the West Coast, presents a strategic fit for ADNOC's global portfolio diversification.
“We see significant potential in Canada, both in conventional upstream and LNG,” the executive said. “XRG is our vehicle to pursue these opportunities, and we are in early-stage discussions with several stakeholders.”
Canada's Energy Landscape
Canada is the world's fourth-largest oil producer and is ramping up LNG exports, with projects like LNG Canada and Woodfibre LNG nearing completion. The country's stable regulatory environment and proximity to Asian markets make it an attractive destination for Middle Eastern energy firms seeking to expand beyond traditional markets.
ADNOC's interest aligns with Canada's goal to diversify its energy exports and reduce reliance on the United States. The UAE is already a significant investor in Canadian energy, with Mubadala Petroleum holding stakes in several oil sands projects.
XRG's Role
XRG, launched in 2025, is ADNOC's international investment arm focused on gas and LNG. It aims to build a global portfolio of integrated gas assets, from upstream production to liquefaction and trading. The executive noted that Canada fits perfectly into this strategy, offering both resource base and infrastructure opportunities.
“XRG is not just about financial investment; we bring technology, operational expertise, and market access,” he added. “Canada can benefit from our experience in developing large-scale energy projects.”
The news comes as Canadian Prime Minister Mark Carney met with UAE Minister of Industry and Advanced Technology and ADNOC Managing Director Sultan Ahmed al-Jaber in Abu Dhabi in November 2025, signaling growing bilateral energy ties.
Industry analysts say ADNOC's entry could accelerate Canada's LNG development, providing capital and expertise needed to compete with U.S. Gulf Coast exporters. However, environmental groups have raised concerns about increased fossil fuel production amid climate change goals.
ADNOC's move also reflects a broader trend of Middle Eastern national oil companies expanding internationally, seeking to secure market share in the global energy transition. Canada, with its abundance of natural gas and oil, remains a key target for such investments.
