Adnoc and Dubai Supply Authority sign natural gas deal

State oil company will supply the fuel required to generate electricity at the Hassyan power complex in Dubai

President Sheikh Mohamed and Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, look on as Sheikh Ahmed bin Saeed and Dr Sultan Al Jaber sign the agreement. Photo: UAE Presidential Court

Adnoc and the Dubai Supply Authority (Dusup) have signed a strategic agreement for the sale of natural gas.

The signing of the agreement was witnessed by President Sheikh Mohamed and Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai.

Under the deal, Adnoc will supply the authority with gas to generate electricity at the Hassyan power complex in Dubai, state-run news agency Wam reported on Friday.

The move, which will replace clean coal with natural gas, will significantly reduce emissions from power-generation operations and directly support the UAE's pledge for net zero emissions by 2050, it said.

“This agreement further strengthens energy co-operation between Abu Dhabi and Dubai … to expand the breadth and depth of our energy relations,” said Sheikh Ahmed bin Saeed, chairman of the Dubai Supreme Council of Energy and director general of Dusup.

“While many countries around the world are returning to coal as a result of geopolitical uncertainty and energy price volatility, the UAE is delivering on its commitment to decarbonise its power sector.”

Dubai plans to become a carbon-neutral economy and generate 100 per cent of the emirate's total power needs from clean energy sources by 2050.

Dusup supplies the energy needs of a number of utility and industrial companies in Dubai. It is responsible for the purchase, sale, storage and transport of natural gas and liquefied natural gas in the emirate.

It supplies natural gas to the Dubai Electricity and Water Authority, Dubal, Dugas, the Emirates National Oil Company and Dubai Petroleum for their power generation, desalination and industrial needs.

To meet its customer's needs, Dusup relies on its Margham storage unit, gas control station, LNG floating storage and regasification unit and pipeline network.

Adnoc is advancing its efforts to harness Abu Dhabi’s vast natural gas resources to meet the world’s growing demand for the transition fuel and enable a responsible energy transition, said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and Adnoc's managing director and group chief executive.

“Working in close collaboration with our customers and partners, Adnoc will continue to expand our natural gas capacity to deliver against our strategic objectives of decarbonising our energy and power systems, ensuring UAE gas self-sufficiency and driving long-term and sustainable growth for the UAE,” he said.

Domestically produced natural gas is more commercially competitive than imported coal or gas, and will support economic growth while lowering emissions when used as a substitute for coal in power generation, Wam reported.

The Hassyan Power Complex was initially built as a dual-fuel plant with the ability to operate at full capacity on both natural gas or clean coal. However, it has been transformed to run only on natural gas.

The present net electricity generation capacity of the Hassyan Power Complex is 1,200 megawatts. A further 600MW (net) is scheduled to be added in the fourth quarter of 2022 and another 600MW (net) will be added by the third quarter of 2023.

The complex is an addition to Dewa's power generation projects, including the Jebel Ali Power and Desalination Complex, Al Aweer Power Station Complex and the Mohammed bin Rashid Al Maktoum Solar Park.