Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company (TAQA) have closed financing for a $3.8bn project to decarbonise ADNOC’s offshore production operations.
ADNOC and TAQA have teamed up with a consortium comprising Korea Electric Power (KEPCO), Kyushu Electric Power Company (Kyuden) and Électricité de France (EDF).
The consortium will build, own, operate and transfer (BOOT) the high-voltage direct current (HVDC) sub-sea transmission network in the Middle East and North Africa (MENA) region.
The KEPCO-led consortium will hold a 40% stake in the project, while ADNOC and TAQA will own a 30% stake each.
Initially announced in December last year, the project rapidly advanced from concept to development phase, with construction starting earlier this year.
The transmission system will have 3.2GW of total installed capacity and will comprise two independent sub-sea HVDC links and converter stations.
The project, which supports the ‘UAE Net-Zero by 2050 Strategic Initiative’, is expected to complete in 2025, and will be returned to ADNOC after 35 years of operation.
UAE Minister of Industry and Advanced Technology and ADNOC Group CEO Sultan Al Jaber said: “ADNOC has once again demonstrated its ability to successfully structure and close a bold and progressive transaction that will help secure our low-carbon future as we intensify our efforts to decarbonize our operations.
“This innovative and first-of-its-kind project in the region is driving responsible and sustainable value creation into Abu Dhabi, further cementing the UAE’s standing as a trusted, go-to investment destination of global capital.
“As the responsible provider of reliable and low-carbon energy, ADNOC will continue to work with our partners to advance practical and commercially viable solutions as the energy transition partner of choice.”
The decarbonisation project is expected to reduce the carbon footprint of ADNOC’s offshore operations by more than 30%.
It will replace existing offshore gas turbine generators with more sustainable power sources available on the Abu Dhabi onshore power network.
The project will be operated by TAQA’s wholly owned subsidiary, Abu Dhabi Transmission and Despatch Company (TRANSCO).
ADNOC said that more than 50% of the investment in the project will flow back into the UAE’s economy under its In-Country Value (ICV) programme.
TAQA chairman Mohamed Hassan Alsuwaidi said: “TAQA is taking a progressive role in accelerating the UAE’s energy transition by delivering cohesive solutions that enable cleaner sources of power to fuel economic growth.
“Reaching financial close is an important milestone for this distinctive project, which will see TAQA providing ADNOC offshore facilities with low-carbon energy securely and efficiently through TRANSCO’s power network system.
“TAQA continues to showcase how its expertise can be utilized to decarbonise industry through strategic partnerships and bringing value to its stakeholders.”
