AD Ports partners with KazMunayGas to explore building marine and tanker fleets

Group has also signed a preliminary agreement with the Ministry of Industry and Infrastructural Development

President Sheikh Mohamed and Kassym-Jomart Tokayev, President of Kazakhstan, pictured with UAE and Kazakh officials at Qasr Al Watan in Abu Dhabi. Photo: UAE Presidential Court
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Abu Dhabi Ports Group has signed a partnership with Kazakhstan's state energy company KazMunayGas and a preliminary accord with the country's Ministry of Industry and Infrastructural Development to co-operate in the development of a national marine fleet and coastal infrastructure in the Caspian and Black seas.

The group will collaborate with the Kazakh ministry to develop international trade and transport corridors and study options to build port and logistics facilities in the country, AD Ports said in a statement to Abu Dhabi Securities Exchange, where its shares are traded.

Separately, AD Ports and KazMunayGas will look to explore partnerships across a broad range of projects, including the development of a new fleet of shallow-water vessels to support offshore operations in the Caspian Sea.

They will also study the development of a tanker fleet to support the export of Kazakh oil, AD Ports said.

The two partners will also discuss a potential joint venture to participate in bulk cargo transport and will explore opportunities to build or acquire bulk cargo vessels to support that operation.

The new pacts build on the shareholder agreement AD Ports signed in December with Kazmortransflot (KMTF), a subsidiary of KazMunayGas, to set up a joint venture.

The venture, which will be 51 per cent owned by AD Ports Group, is expected to offer a broad range of services, including offshore support and crude oil transport vessels in the Caspian and Black seas.

AD Ports, which also signed a vessel-pooling agreement with KMTF, would aim to jointly transport eight million to 10 million tonnes of crude oil annually in the medium-term.

KMTF, the offshore logistics arm of KazMunayGas, will submit tender for a “number of identified projects” with estimated maritime contract values of more than $780 million, AD Ports said in a bourse filing at the time.

The Caspian Sea region, one of the oldest oil-producing areas in the world, plays an increasingly important role in the energy industry. The area has significant oil and natural gas reserves in the Caspian Sea and onshore in the Caspian basin.

The new agreement signals a significant expansion for AD Ports in Central Asia and Kazakhstan, which continues to gain importance as a trade route between Europe and Asia.

The deals come as Kazakhstan looks to expand production from its giant Kashagan oilfield, which is operated by a consortium that includes Italy’s Eni, US-based ExxonMobil and KazMunayGas.

The country is also pursuing a goal of reaching carbon neutrality by 2060 and is aiming to increase its share of renewable energy in domestic electricity generation to 10 per cent by 2030 and 50 per cent by 2050.

Also on Wednesday, Abu Dhabi’s clean energy company Masdar signed an agreement to develop a wind power plant with up to 1 gigawatt total capacity in Kazakhstan, marking the clean energy company's first investment in the Central Asian country.

The agreement was signed between Masdar, the Kazakh Ministry of Energy and the Kazakhstan Investment Development Fund, Masdar said in a statement.

As per the agreement, the three parties will jointly develop the project, with the first phase focused on deploying a capacity of 500 megawatts with the possible inclusion of battery storage.

“Masdar has already developed a strong presence in Central Asia, and by leveraging our experience of the region, we aim to deliver a world-class wind plant that will support Kazakhstan’s energy transition and advancement of its net zero ambitions,” said Mohamed Al Ramahi, chief executive of Masdar.

Last week, Masdar signed an agreement with Kyrgyzstan’s energy ministry to develop clean energy projects with a capacity to generate up to 1 gigawatt. The pipeline of projects will start with a 200 megawatt solar photovoltaic plant, which is expected to begin operations by 2026.

Masdar, which is building a 230MW solar project in Azerbaijan, is also active in Uzbekistan and Armenia.

Last month, the Abu Dhabi National Energy Company, better known as Taqa, Mubadala Investment Company and Adnoc completed a deal to become shareholders in Masdar.

It is expected to help the company grow rapidly on a global scale under an expanded mandate that covers renewable power, green hydrogen and other clean energy technology.

Masdar now has a goal of achieving 100 gigawatts of renewable energy capacity annually by 2030.

The company aims to add up to 10 gigawatts of capacity this year and is considering acquisitions and new projects in different markets as part of its growth strategy, a senior executive said this week.

The additional capacity “will come from across all countries”, Fawaz Al Muharrami, executive director of clean energy at Masdar, told The National in an interview on the sidelines of Abu Dhabi Sustainability Week.

“We have different models of investment. We have greenfield development which we are going to continue to develop. We also have acquisitions that are an important part of our business and we will continue to acquire [projects].”

Updated: January 18, 2023, 8:39 AM