PART II: Abu Dhabi moves to improve its carbon footprint

In support of the UAE Net Zero 2050 strategic initiative, a number of Abu Dhabi government owned/controlled entities have announced projects to improve their carbon footprint. Abu Dhabi’s state-owned integrated oil company, Abu Dhabi National Oil Company (ADNOC), which manages ~95% of the UAE’s proven oil reserves, has been a key player in a number of these.

Notably, in December, ADNOC and Abu Dhabi National Energy Company PJSC aka TAQA (98.6% indirectly owned by the Abu Dhabi government) announced a USD3.6bn strategic project to significantly decarbonise ADNOC’s offshore operations. More specifically, the project looks to establish a sub-sea transmission network connecting ADNOC’s offshore operations with TAQA’s onshore clean power network. This is to be funded by a SPV in which ADNOC and TAQA will each have 30% stakes while the 40% balance will be owned by a consortium of KEPCO, Kyushu Electric Power Co. and EDF. The consortium will develop and operate the transmission system along with ADNOC and TAQA and the project will be returned to ADNOC after 35 years.

This project is expected to result in a 30% reduction in the carbon footprint of ADNOC’s offshore operations as offshore gas turbine generators are replaced with more sustainable power sources. TAQA’s CEO and Managing Director Jasim Husain Thabet commented: “As the recognized low carbon power and water champion of Abu Dhabi and one of the top 5 utilities in EMEA by market value, TAQA is pleased to again partner with ADNOC on such an important project that will contribute to the decarbonization of Abu Dhabi’s energy industry in such an impactful way. This first-of-its-kind project shows how the UAE continues to demonstrate its strong leadership and innovation in the global energy transition by bringing together critical players to boost sustainability credentials and maximizing the utilization of Abu Dhabi’s diverse and efficient energy mix. 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.”

Other recent project announcements include a partnership between ADNOC and EWEC to supply power from EWEC’s nuclear and solar clean energy sources for up to 100% of ADNOC’s onshore and 90% of ADNOC’s offshore production. Plus, a renewable energy 2030 project for 50GW between TAQA, ADNOC and Mubadala has been announced.

More on the latter to follow tomorrow.

Fixed Income Team