Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company (TAQA) announced a $3.6 billion (AED13.22 billion) strategic project to significantly decarbonise ADNOC’s offshore production operations, further strengthening their position in driving and leading sustainability efforts and supporting the UAE Net-Zero by 2050 Strategic Initiative.
The project will be funded through a special purpose vehicle (SPV) – a dedicated company that will be jointly owned by ADNOC and TAQA (30% stake each), and a consortium comprised of Korea Electric Power Corporation (KEPCO), Japan’s Kyushu Electric Power Co. and Électricité de France (EDF). Led by KEPCO, the consortium will hold a combined 40 percent stake in the project on a build, own, operate and transfer basis.
The consortium will develop and operate the state-of-the-art transmission system alongside ADNOC and TAQA, with the full project being returned to ADNOC after 35 years of operation. The project is subject to relevant regulatory approvals.
The development is expected to reduce the carbon footprint of ADNOC’s offshore operations by more than 30 percent, replacing existing offshore gas turbine generators with more sustainable power sources available on the Abu Dhabi onshore power network. This progressive and collaborative approach will also drive operational efficiencies and improve system reliability of energy supply, while offering the potential for power supply cost optimisation.
More than 50 percent of the project value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program, underpinning ADNOC and TAQA’s commitment to driving responsible and sustained investment and value creation for Abu Dhabi and the UAE.
The transmission system will have a total installed capacity of 3.2 Gigawatts (GW) and comprise two independent sub-sea HVDC links and converter stations that will connect to TAQA’s onshore electricity grid – operated by its subsidiary, Abu Dhabi Transmission and Despatch Company (TRANSCO). Construction is expected to begin in 2022 with commercial operation commencing in 2025.
The project also offers the potential for ADNOC to more effectively utilise its rich gas – currently used to power the offshore facilities – for higher-value purposes, allowing ADNOC to generate additional revenue. A tender for this innovative project was issued in April 2020 resulting in very strong interest from international companies. Following this highly competitive tender process the consortium was selected.
This project follows the recently announced global clean energy venture between TAQA, ADNOC and Mubadala, targeting a total generating capacity of at least 50 GW of renewable energy by 2030, and the landmark clean energy partnership with EWEC, which will see up to 100% of ADNOC’s onshore and more than 90 percent of ADNOC’s offshore production operations supplied by EWEC’s nuclear and solar clean energy sources.