The two companies, along with an international consortium, are developing first-of-its-kind subsea energy transmission system in the Mena region.
Abu Dhabi National Oil Company and Abu Dhabi National Energy Company, known as Taqa, has launched a $3.6 billion renewable energy project to significantly decarbonise the state-owned oil and gas producer’s offshore production operations and help the UAE achieve its 2050 net-zero ambitions.
The companies are developing and will operate first-of-its-kind high-voltage, direct current (HVDC-VSC) subsea transmission system in the Mena region, Adnoc said in a statement on Wednesday.
The transmission system will power Andoc’s offshore production operations with cleaner and more efficient energy, which will be delivered through Taqa-owed Abu Dhabi onshore power grid.
The project will be funded through a special purpose vehicle – a dedicated company in which Adnoc and Taqa will each own a 30 per cent stake. A Korea Electric Power Corporation (Kepco)-led consortium, which includes Japan’s Kyushu Electric Power Company and Électricité de France (EDF) will hold a combined 40 per cent stake in the project on a build, own, operate and transfer basis, Adnoc said.
The consortium will develop and operate a transmission system alongside Adnoc and Taqa, with the full project being returned to Adnoc after 35 years of operation.
“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,” Yaser Almazrouei, Adnoc upstream executive director, said.
“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 investment, and, in turn, cementing Abu Dhabi and the UAE’s position as a trusted global investment destination.”
The transmission system will have a total installed capacity of 3.2 gigawatts 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. Construction is expected to begin in 2022 with commercial operation commencing in 2025, Adnoc said.
The project also offers the potential for Adnoc to more effectively utilise its rich gas – currently being used to power the offshore production facilities – for higher-value purposes that will allow the company to generate additional revenue.
The development is expected to reduce Adnoc’s offshore operations carbon footprint by more than 30 per cent, replacing existing offshore gas turbine generators with more sustainable power sources from the Abu Dhabi onshore power network. It will also also drive operational efficiencies and improve system reliability of energy supply, as well as power supply cost optimisation, the company said.
The 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”, Jasim Thabet, Taqa’s group chief executive and managing director, said.
“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.”
(Except for the headline, this story has not been edited by The Finance World staff and is published from a syndicated feed.)
