The Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi Power Corporation (ADPower) have issued a joint tender to develop and operate the first high-voltage, direct current (HVDC) subsea transmission system of the region, that will connect ADNOC’s offshore production plants to ADPower’s onshore electricity grid using the state-of-the-art technology.
A first-of-its-kind, innovative project, initiated by ADNOC in line with its continued aspiration to drive efficiencies and improve resilience, brings together UAE’s two crucial entities. Together, ADNOC and ADPower can deliver valuable long-term synergies in national infrastructure and collectively draw international partners to Abu Dhabi. This milestone project exhibits both organization’s dedication to continuously encourage responsible and sustained investment and value creation for Abu Dhabi and the UAE, and support the ongoing development of the national economy in this difficult and challenging period.
The project is presumed to decrease the carbon footprint of ADNOC’s offshore facilities by up to 30% through ADPower’s efficient onshore power production. It also offers power supply cost optimization potential for ADNOC’s offshore plants and will drive operational efficiency and system reliability by replacing the existing offshore localized gas turbine generators with diverse, more efficient and environmentally sustainable sources of energy, including renewable and nuclear power.
The project offers immense 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 income for ADNOC and Abu Dhabi.
“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 utilize 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.”
Applications for proposals have been sent to international companies that have the necessary expertise to associate 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.
“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.”
This significant capital project will be financed through a special purpose vehicle jointly owned by ADNOC (30% stake), ADPower (30% stake) and the selected developers and investors (40% 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 manage the transmission system, with the full project being returned to ADNOC at the end of the transmission contract.