Adnoc, Taqa announce $3.6 billion project to power offshore operations - GulfToday

Adnoc, Taqa announce $3.6 billion project to power offshore operations

Officials of Adnoc and Taqa during the virtual signing event.

Officials of Adnoc and Taqa during the virtual signing event. WAM

Abu Dhabi National Oil Company (Adnoc) and Abu Dhabi National Energy Company (Taqa) announced on Wednesday a $3.6 billion strategic project to significantly decarbonise Adnoc’s offshore production operations, further strengthening Adnoc and Taqa’s position in driving and leading sustainability efforts and supporting the United Arab Emirates (UAE) ‘Net-Zero by 2050 Strategic Initiative’.

The innovative project will see the development and operation of a first-of-its-kind high-voltage, direct current (HVDC-VSC) subsea transmission system in the Middle East and North Africa (Mena) region. It will power Adnoc’s offshore production operations with cleaner and more efficient energy, delivered through the Abu Dhabi onshore power grid, owned and operated by Taqa’s transmission and distribution companies.

The project will be funded through a special purpose vehicle (SPV) - a dedicated company that will be jointly owned by Adnoc and Taqa (30 per cent stake each), and a consortium comprised of Korea Electric Power Corporation (Kepco), Japan’s Kyushu Electric Power Co. and Electricite de France (EDF). Led by Kepco, the consortium will hold a combined 40 per cent 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 per cent, 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.

Yaser Saeed Almazrouei, Adnoc Upstream Executive Director, said: “Adnoc is delighted to be collaborating again with Taqa, as we jointly welcome world-class industry leaders in yet another landmark transaction that will see Adnoc make a significant step forward in our ongoing decarbonization journey. As Adnoc embraces the energy transition, this bold and progressive project will replace our existing offshore local power supply with cleaner and more sustainable onshore power sources, significantly reducing our carbon footprint while enabling additional cost savings. This first-of-its-kind project is a further example of how Adnoc is advancing practical and commercially viable solutions to secure a lower carbon future, while driving significant foreign direct invesment, and, in turn, cementing Abu Dhabi and the UAE’s position as a trusted global investment destination.”

More than 50 per cent of the project value will flow back into the UAE’s economy under Adnoc’s In-Country Value (ICV) programme, underpinning ADNOC and TAQA’s commitment to driving responsible and sustained investment and value creation for Abu Dhabi and the UAE.

Jasim Husain Thabet, Taqa’s Group CEO and Managing Director, said: “As the recognized low carbon power and water champion of Abu Dhabi and one of the top 5 utilities in Emea by market value, Taqa is pleased to again partner with Adnoc on such an important project that will contribute to the decarbonization of Abu Dhabi’s energy industry in such an impactful way. This first-of-its-kind project shows how the UAE continues to demonstrate its strong leadership and innovation in the global energy transition by bringing together critical players to boost sustainability credentials and maximising the utilisation of Abu Dhabi’s diverse and efficient energy mix.

Decarbonisation continues to provide social and economic opportunities for collaboration and growth, which Taqa is actively pursuing through its strategic alliances and partnerships in the market.”

Seung-il Cheong, President and CEO of Kepco, said: “It is truly an honor to participate in this strategic project with Adnoc. As the Barakah Nuclear Power Project has become a token of long friendship and cooperation between the UAE and Korea, Kepco will strive for the successful completion of this Project and contribute to the ‘2050 Net-Zero Initiative’ of the UAE.”

Kazuhiro Ikebe, President and CEO of Kyushu Electric Power Company, said: “Kyuden Group is honored to have been selected as a business partner for this project. We are pleased that the realization of this project will contribute to the reduction of CO2 emissions at Adnoc’s oil production facilities by more than 30 per cent. Our Group has just announced an action plan for carbon neutrality, and we are determined to promote energy businesses that contribute to the reduction of carbon emissions globally. We hope to contribute to the stable operation of this project by utilising the know-how we have cultivated in the electric power business in Japan and overseas.”

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