Abu Dhabi National Energy Company PJSC (TAQA) and Abu Dhabi National Oil Company (ADNOC) announced today a $3.6 billion strategic project to significantly decarbonize ADNOC’s offshore production operations, further strengthening TAQA and ADNOC’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 TAQA and ADNOC (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% 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 TAQA and ADNOC, 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%, 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 optimization.
More than 50% of the project value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program, underpinning TAQA and ADNOC’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 utilize 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. (read more)
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