ADNOC and Taqa, respectively the national oil and energy companies of Abu Dhabi, have announced financial close on a $3.8bn project for electrification of offshore oil and gas assets in the UAE.
The “first-of-its-kind” scheme will see a high-voltage direct current (HVDC) subsea transmission network created to significantly decarbonise offshore production as part of the UAE’s plans to reach net zero by 2050.
It will be delivered in a consortium including Korea Electric Korea Electric Power (KEPCO), Kyushu Electric Power Company (Kyuden) and Électricité de France (EDF).
The development is expected to reduce the carbon footprint of ADNOC’s offshore operations by more than 30% and is expected to be in commercial operation in 2025.
That includes work at Upper Zakum, the world’s second-largest oil field.
First announced in December, the consortium holds 40% of the electrification project with the remaining 60% split evenly between ADNOC and Taqa.
The full scheme will be returned to ADNOC after 35 years of operation.
Higher interest rates since then have seen the cost increase from $3.6bn to $3.8bn, and more than 50% of the value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program.
Sultan Al Jaber, UAE Minister of Industry and Group CEO of ADNOC, 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.”
Early construction work started earlier this year with the purchase of long-lead items.
The HVDC cable will have a total installed capacity of 3.2 Gigawatts (GW) and will comprise two independent sub-sea HVDC links and converter stations.
Mohamed Hassan Alsuwaidi, Chairman of TAQA, 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 decarbonize industry through strategic partnerships and bringing value to its stakeholders.”