ADNOC Launches Tender for Subsea Power Grid to Cut Costs and Replace Gas

The UAE wants to free up gas used in power generation for other industrial uses. The UAE, where currently power is mostly generated from gas, wants to produce 44% of its power from clean energy by 2050.

April 27, 2020

Abu Dhabi National Oil Co, the UAE’s biggest energy producer, has launched a joint tender with electricity and water company ADPower to develop a 3.2 GW subsea power transmission network for its offshore facilities that will help cut costs and replace gas used for power generation.

ADNOC is partnering with ADPower to replace its gas turbine generators at its offshore production facilities with different sources of energy, including renewables and nuclear power, it said in a statement on Monday. ADNOC’s offshore facilities will be linked to ADPower’s onshore electricity grid.

“The project also offers 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 revenue for ADNOC and Abu Dhabi,” the statement said.

Abu Dhabi, the oil-rich emirate in the UAE, is developing various sources of energy, including nuclear reactors to become the first country in the Gulf region to harness nuclear energy for power generation.

“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,” said Yaser Al Mazrouei, ADNOC Upstream executive director.

ADNOC and ADPower have sent requests for proposals to international companies to develop a total installed capacity of 3.2 GW, which should be operational by 2025. The transmission system will include two independent sub-sea HVDC transmission links and converter stations that will be connected to ADPower’s onshore electricity grid. The project will be financed through a special purpose vehicle jointly owned by ADNOC (30%), ADPower (30%) and selected developers and investors (40%).

“The project is to be executed on a build, own, operate and transfer (BOOT) basis,” ADNOC said. “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.”