The Abu Dhabi National Oil Company, ADNOC, and Abu Dhabi Power Corporation, ADPower, have announced the issuance of a joint tender for a first-of-its-kind project in the Middle East & North Africa (MENA) region.
The joint tender sets out to develop and operate the region’s first high-voltage, direct current, HVDC, sub-sea transmission system, that will connect ADNOC’s offshore production facilities to ADPower’s onshore electricity grid using state-of-the-art technology, ADNOC said in a statement.
This innovative project, initiated by ADNOC in line with its continued objective to drive efficiencies and bolster resilience, brings together two vital UAE entities.
Together, ADNOC and ADPower will deliver valuable long-term synergies in national infrastructure and jointly attract international partners to Abu Dhabi. In addition, this milestone project demonstrates the two entities’ commitment to continuously drive responsible and sustained investment and value creation for Abu Dhabi and the UAE, and support the ongoing development of the national economy in this complex and challenging period.
The project is expected to reduce the carbon footprint of ADNOC’s offshore facilities by up to 30 percent through ADPower’s efficient onshore power production. It also offers power supply cost optimisation potential for ADNOC’s offshore facilities and will drive operational efficiency and system reliability by replacing the existing offshore localised gas turbine generators with diverse, more efficient and environmentally sustainable sources of energy, including renewable and nuclear power.
The project also offers potential for ADNOC to more effectively utilise its rich gas – currently used to power the offshore facilities – for higher-value purposes, allowing ADNOC to generate additional revenue for ADNOC and Abu Dhabi.
Commenting on the tender issuance, Yaser Saeed Al Mazrouei, ADNOC Upstream Executive Director, said, “We are very pleased to partner with ADPower on this innovative project that is a logical result of ADNOC’s transformation journey, directly supporting our value creation and sustainability strategy as well as our objective to remain one of the world’s lowest-cost oil producers and lowest-carbon emitters in our industry.
“This project will meet our future offshore power needs, even as our fields mature, using diverse and sustainable sources. It will lower ADNOC and the UAE’s carbon footprint, whilst at the same time enabling ADNOC to utilise the natural gas currently used to power our offshore facilities for higher-value purposes. Equally, the project will deliver operational expenditure reductions in the long run as well as lasting strategic benefits as we continue to drive sustainable value and responsible investment opportunities that stimulate economic growth for Abu Dhabi and the UAE in the current market environment.”
Omar Alhashmi, Executive Director Asset Management at ADPower, said, “As we continue to accelerate the transformation of Abu Dhabi’s water and electricity sector, ADPower is pleased to partner with ADNOC on this important, innovative, large-scale effort. Working together, we are reinforcing Abu Dhabi’s global position as we implement this first-of-a-kind mega project that will not only create synergy between two critical industries, but drive the Emirate’s economic growth through long-term value creation.”
Requests for proposal have been sent to international companies that have the requisite experience to partner with ADNOC and ADPower on this important infrastructure project for Abu Dhabi. The transmission system will comprise two independent sub-sea HVDC transmission links and converter stations that will connect to ADPower’s onshore electricity grid – operated by its subsidiary, Abu Dhabi Transmission and Despatch Company, TRANSCO – and provide a total installed capacity of 3,200 megawatts. Commercial operation is expected in 2025.
This significant capital project will be funded through a special purpose vehicle jointly owned by ADNOC (30 percent stake), ADPower (30 percent stake) and the selected developers and investors (40 percent stake). The project is to be executed on a build, own, operate and transfer, BOOT, basis. The successful bidders, alongside ADNOC and ADPower, will develop and operate the transmission system, with the full project being returned to ADNOC at the end of the transmission agreement.