Abu Dhabi’s XRG Seeks LNG Canada Stake as Gulf Supply Tightens

Abu Dhabi’s XRG is in talks to buy into LNG Canada, the Shell-operated export terminal that only began producing in 2025 and is now being contested by state-backed energy firms racing to secure Pacific-facing supply as Middle East conflict squeezes global gas flows.

The discussions, reported on 22 September 2026 by Bloomberg citing sources with knowledge of the matter, land at a moment when Qatar’s disrupted deliveries have removed a supply source that reportedly accounted for close to one-fifth of worldwide LNG trade. The market has tightened, and buyers are reassessing which export infrastructure sits safely outside Gulf chokepoints.

LNG Canada, perched on British Columbia’s Pacific coast and oriented toward South Korea, Japan, and China, has become one of the most strategically positioned assets in the industry.

This piece sets out what XRG is actually pursuing, where PetroChina’s stake sale process stands, what the MidOcean-Petronas transaction tells us about the direction of ownership, and what a potential Phase 2 Final Investment Decision as early as October 2026 means for the project’s value. Here is everything an energy-market observer needs to understand why this asset is drawing so much capital right now.

What XRG is pursuing, and where the talks actually stand

Start with what is firm. XRG, Abu Dhabi’s international energy investment arm backed by state producer ADNOC, has entered into early-stage negotiations with several current LNG Canada stakeholders, PetroChina among them, with the aim of acquiring portions of those parties’ ownership interests. The company has publicly stated an ambition to rank among the world’s top five natural gas and petrochemicals suppliers, and a Pacific LNG position fits that goal directly.

XRG’s broader LNG value chain strategy, which involves an $80 billion deployment across gas production, liquefaction, and trading, frames the LNG Canada talks as one component of a systematic push to build Pacific and Atlantic supply positions simultaneously.

This is not a sudden development. XRG’s upstream chief executive Musabbeh Al Kaabi flagged interest in Canadian opportunities as early as June 2026, three months before the Bloomberg reporting surfaced.

Now the uncertainty. No transaction has been announced or closed. Representatives for XRG, LNG Canada, and Shell declined to comment, PetroChina did not respond, and the discussions were sourced to unnamed individuals. Bloomberg itself notes there is no certainty the deliberations lead anywhere.

Here is the current ownership structure the talks are circling.

Taken together, XRG’s named interest and PetroChina’s parallel process tell you this is not casual market chatter. A genuine ownership realignment is underway. What you should not do is treat exploratory talks as a done deal, because early-stage LNG reporting frequently gets ahead of the commercial reality.

PetroChina’s stake process: what is on the table

PetroChina engaged an adviser in July 2026 to gauge buyer interest in part of its 15% stake, though as of 31 July 2026 no plan had been finalised and no buyer named. Proceeds from any sale are reportedly earmarked to help fund the Phase 2 expansion, tying the stake question to the project’s future capacity.

Chemnet reporting from 31 July 2026 describes PetroChina weighing several small transactions rather than one block sale, which suggests a gradual reduction rather than a clean exit.

Why LNG Canada has become the most sought-after LNG asset in the Pacific basin

Look at the map, and the appeal explains itself. LNG Canada sits at Kitimat on British Columbia’s Pacific coast, with Phase 1 producing since 2025 after a seven-year build following the 2018 partner approval of the C$40 billion project. Its cargoes reach South Korea, Japan, and China across trans-Pacific shipping lanes.

Now look at where the competition ships from. Gulf LNG exporters, Qatar chief among them, depend on the Strait of Hormuz for seaborne export. Conflict or closure at that chokepoint directly threatens a large share of global flows.

The Hormuz disruption that underpins LNG Canada’s strategic premium is not a theoretical scenario; Gulf exporters including Qatar depend on that single chokepoint for the bulk of their seaborne LNG deliveries, and any closure concentrates market risk on exactly the routes Pacific-facing terminals like Kitimat are now priced to avoid.

Market share at risk Qatar reportedly supplied close to one-fifth of the worldwide LNG market in the prior year before Middle East conflict disrupted deliveries. This figure is referenced in source material and has not been independently confirmed.

That is the differential. LNG Canada’s Pacific route never touches the Gulf, which is precisely the property state-backed buyers are paying to secure.

The route advantages break down cleanly:

• No Strait of Hormuz transit, removing exposure to the Gulf chokepoint entirely
• Direct proximity to major Asian demand centres in Japan, South Korea, and China
• Diversification away from Middle Eastern supply concentration at a moment of acute geopolitical risk

None of this was theoretical in September 2026. The Hormuz exposure concentrated in Gulf routes was a live problem, and that is why LNG Canada’s Pacific orientation now commands a strategic premium it did not carry at the same intensity before the conflict escalated.

For anyone trying to make sense of the intensity of buyer interest, this geography is the foundation. Without the Hormuz risk differential, the scramble for this one asset makes no sense. With it, the queue of state-backed capital becomes entirely logical.

Saudi Aramco capital is already inside LNG Canada: what the MidOcean deal tells us

XRG is not the first mover here. In mid-September 2026, MidOcean, an LNG company backed by EIG and Saudi Aramco, agreed to buy a 20% interest in the Petronas North Montney LNG Limited Partnership, the vehicle through which Petronas holds its 25% stake in LNG Canada, according to Reuters and Rigzone reporting.

The structural consequence is direct. Saudi Aramco-backed capital is now embedded in LNG Canada’s ownership indirectly, and it got there days before XRG’s own discussions surfaced.

Set the two moves side by side and a pattern emerges without anyone needing to assert it.

MidOcean’s acquisition activity across Pacific-basin LNG assets has been systematic: the same buyer that agreed to acquire 20% of the Petronas partnership vehicle in LNG Canada had already been acquiring Australian LNG stakes from JERA in the weeks prior, building a portfolio of non-Gulf supply positions across multiple jurisdictions.

1. Mid-September 2026: MidOcean, backed by Saudi Aramco, agrees to acquire 20% of the Petronas partnership vehicle holding a 25% LNG Canada stake.
2. 22 September 2026: XRG, backed by Abu Dhabi’s ADNOC, is reported in exploratory talks to buy portions of partner holdings.

Two Middle Eastern national-oil-company-backed entities have, within weeks of each other, taken or sought positions in the same Pacific-facing Canadian asset. For anyone tracking global LNG ownership, that sequence signals a structural shift in who controls Pacific-facing supply, with knock-on effects for both supply security and the commercial terms of long-term offtake deals tied to these plants.

XRG’s talks are best read as acceleration of that trend, not an isolated move.

Shell and Mitsubishi weigh their options

The realignment may not stop at PetroChina. The Economic Times reports that both Shell and Mitsubishi are exploring exit options from LNG Canada amid the expansion talks and broader market uncertainty.

Treat this as context, not confirmed news. These are exit explorations, not announced sales. If they progress, they would open further ownership reshuffling well beyond PetroChina’s stake process, and they hint that not every existing partner shares the bullish read on Phase 2.

Phase 2 FID by October: what an expansion decision means for every stakeholder now in the room

Everything above is happening against a clock. Market sources cited by Zacks on 22 September 2026 and MiningWeekly on 18 September 2026 indicate partners could reach a Final Investment Decision on Phase 2 as early as October 2026. No FID had been taken as of 23 September 2026.

Phase 2 is a multi-billion-dollar expansion intended to roughly double annual production from the current 14 million tonnes per annum toward approximately 28 million tonnes. The Government of Canada describes it as a “key national and provincial priority project.”

The groundwork is already laid. On 1 May 2026, LNG Canada’s Joint Venture Participants approved hundreds of millions of dollars in incremental funding to finalise Phase 2 work scopes, per an LNG Canada press release. A Canada-British Columbia agreement on enhanced investment co-operation followed on 14 May 2026.

Conditions still stand between the project and a green light. Per LNG Canada’s own May 2026 communications, each participant must independently satisfy:

• Commercial requirements specific to each partner
• Fiscal arrangements
• Regulatory approvals
• Governance requirements

Any new shareholder, XRG included, would have to clear the same bar. That matters for how you read the timing.

A potential FID in October 2026 means anyone seeking a stake faces a closing window. Entry after FID is typically more expensive and offers less strategic flexibility, because the terms harden once the expansion is committed. That is the commercial logic pushing XRG and MidOcean to move now rather than wait.

For readers watching this asset, the FID timeline is not a technical footnote. It is the clock driving every ownership conversation in and around LNG Canada this month, and it explains why multiple sophisticated buyers are moving at the same time instead of taking turns.

What the ownership reshuffle changes, and what it leaves unresolved

Put the pieces together and one thing is clear. The XRG talks, the MidOcean deal, and PetroChina’s stake process collectively point to a realignment of Pacific LNG ownership toward Middle Eastern state-backed capital, driven by both geopolitical urgency and a longer-term supply diversification logic.

The volume of simultaneous activity is itself the signal. Multiple state-backed energy investors have independently concluded this asset is worth pursuing before Phase 2 FID locks in the terms, which carries more weight than any single deal announcement would on its own.

For readers tracking XRG’s global supply diversification programme, our dedicated guide to XRG’s Argentina LNG position covers the Vaca Muerta block acquisitions made alongside Eni, which represent the Atlantic-facing counterpart to what XRG is now pursuing in the Pacific.

Here is where things actually stand.

Confirmed:

• MidOcean’s agreement to buy 20% of the Petronas partnership vehicle, mid-September 2026
• LNG Canada Phase 1 producing at 14 million tonnes per annum since 2025
• JVP funding approved 1 May 2026 and the Canada-BC agreement of 14 May 2026

Unresolved:

• Whether XRG’s talks convert to a transaction (none confirmed as of 22 September 2026)
• Whether PetroChina’s process produces a named buyer (no plan finalised as of 31 July 2026)
• Whether Phase 2 FID is taken in October or slips (no FID as of 23 September 2026)
• Whether Shell and Mitsubishi’s reported exit explorations become actual sales

That last point is the counterweight. Two existing partners reportedly exploring the door suggests not everyone shares the confidence embedded in current valuations, and it questions how durable the Hormuz-risk premium proves if Gulf routes stabilise.

For anyone monitoring Canadian energy assets or global LNG supply security, the next sixty days around the FID decision and XRG’s talks represent the most consequential period in the project’s post-construction history.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.

Past performance does not guarantee future results, and the forward-looking elements here, including FID timing and potential transactions, are speculative and subject to change based on market developments and company decisions.