KEPCO, Kyushu Electric Power Co. and EDF to hold combined 40% stake
Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company (TAQA) recently announced today a US$ 3.6bn strategic project to significantly decarbonize ADNOC’s offshore production operations, further strengthening ADNOC and TAQA’s position in driving and leading sustainability efforts and supporting the UAE’s ‘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.
Special Purpose Vehicle
The project will be funded through a special purpose vehicle (SPV) – a dedicated company that will be jointly owned by ADNOC and TAQA (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 ADNOC and TAQA, 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.
Lower carbon future
“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,” affirmed Yaser Saeed Almazrouei, Executive Director, ADNOC Upstream.
More than 50% of the project value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program, underpinning ADNOC and TAQA’s commitment to driving responsible and sustained investment and value creation for Abu Dhabi and the UAE.
“Decarbonization 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,” asserted Jasim Husain Thabet, CEO and Managing Director, TAQA Group.
2050 Net Zero Initiative
“KEPCO will strive for the successful completion of this Project and contribute to the ‘2050 Net-Zero Initiative’ of the UAE,” noted Seung-il Cheong, President and CEO, KEPCO.
“Our Group has just announced an action plan for carbon neutrality, and we are determined to promote energy businesses that contribute to the reduction of carbon emissions globally,” stated Kazuhiro Ikebe, President and CEO, Kyushu Electric Power Company. “EDF is proud to be part of this innovative project that significantly contributes to decarbonize ADNOC operations,” noted Jean-Bernard Lévy, Chairman and CEO, EDF.