ADNOC Shells Out $17B for Groundbreaking Net Zero Natural Gas Venture

ADNOC Sets Global Precedent with $17 Billion Offshore Natural Gas Project Operating at Net Zero Emissions

ADNOC, the largest oil producer in the United Arab Emirates (UAE), has awarded contracts worth approximately $17 billion for an offshore natural gas project that will operate with net zero emissions. This groundbreaking project, part of Abu Dhabi’s Ghasha Concession, consists of two engineering, procurement, and construction (EPC) contracts. The first EPC contract, valued at $8.2 billion, was awarded to a joint venture between Italian oilfield services firm Saipem and Abu Dhabi’s National Petroleum Construction Company (NPCC). The second EPC contract, worth $8.74 billion, was awarded to Milan-based engineering company Maire Tecnimont for onshore projects.

ADNOC’s Hail and Ghasha project aims to capture 1.5 million tonnes per year (mtpa) of carbon dioxide (CO2), bringing the company’s committed investment for carbon capture capacity to nearly 4 million tonnes annually. The captured CO2 will be transported onshore via ship or pipelines and securely stored underground in geological formations. This process, known as carbon capture, utilization, and storage (CCUS), involves trapping CO2 emissions from industrial activities and fossil fuel combustion. The project will also utilize clean energy from nuclear and renewable sources, while producing low-carbon fuel gas that can further reduce emissions. ADNOC plans to double its carbon capture capacity to 10 million tonnes of CO2 per year by 2030. These efforts are part of the company’s commitment to bring forward its net zero emissions target to 2045, five years earlier than its previous goal of 2050. ADNOC is the first among its peers to accelerate its net zero target.

In 2022, ADNOC established a new business division called Low Carbon Solutions & International Growth to align with its net zero goal. This division will focus on CCUS, renewables, and clean hydrogen, while also supporting the company’s international expansion in gas and liquefied natural gas. At the beginning of 2023, ADNOC announced a $15 billion investment in low-carbon projects to address emissions and achieve decarbonization targets. One of the projects included in this investment is the first-of-its-kind CCUS project. The new project also aims to produce over 1.5 billion standard cubic feet per day of gas by 2030, with more than 60% of the investment value flowing back into the UAE’s economy.

Abdulmunim Al Kindy, ADNOC’s executive director, emphasized the significance of natural gas as a transition fuel and stated that ADNOC will continue to responsibly unlock its gas resources to ensure gas self-sufficiency for the UAE, expand export capacity, and support global energy security. He described the project as a major milestone for the company and its partners, highlighting that it will be the first gas project in the world to achieve net zero emissions. The project is expected to contribute to the UAE’s gas self-sufficiency, as well as support ADNOC’s growth and export plans. ADNOC aims to increase its oil production capacity from 4 million to 5 million barrels per day. To decarbonize a portion of its onshore operations, the company plans to utilize renewables and nuclear power, including the installation of a 10-tonne per day carbon capture unit developed by Carbon Clean. ADNOC has also partnered with Occidental to conduct a preliminary study for the creation of the first megaton-scale Direct Air Capture (DAC) facility outside the United States. The proposed facility, connected to ADNOC’s CO2 infrastructure, would inject and permanently store CO2 in saline reservoirs. Additionally, ADNOC has signed a separate $615 million deal with oil services company Petrofac to develop one of the largest carbon capture projects in the MENA region at the Habshan plant. These CCS plans will facilitate the scaling up of hydrogen and lower-carbon ammonia production in Abu Dhabi.

ADNOC’s ambitious move to develop the world’s first offshore net zero emissions natural gas project not only reduces its carbon footprint but also contributes to the UAE’s energy security and export capacity. This initiative aligns with the company’s commitment to achieving net zero emissions by 2045, setting a precedent in the industry as it transitions to cleaner energy production. These new targets are particularly significant as the UAE prepares to host the upcoming COP28 climate conference in November, with ADNOC’s group CEO, Sultan Ahmed Al Jaber, serving as the summit’s president.

In conclusion, ADNOC’s groundbreaking project marks a major step towards a more sustainable energy future. By investing in net zero emissions natural gas production and carbon capture technologies, ADNOC is leading the way in the industry and demonstrating its commitment to tackling climate change. As the UAE’s largest oil producer, ADNOC’s efforts not only contribute to the country’s energy security but also set an example for other companies worldwide. With its accelerated net zero emissions target and significant investments in low-carbon projects, ADNOC is positioning itself as a key player in the transition to a greener and more sustainable energy sector.

Matt Lyons

Matt Lyons

Matt Lyons is the founder of Forestry & Carbon. Matt has over 25 years as a forestry consultant and is invoilved in numerous carbon credit offset projects.

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