Mubadala Energy, the oil and gas unit of Abu Dhabi’s Mubadala Investment Company, has signed an initial agreement to explore opportunities in sustainable fuels and feedstock production in Pakistan.
As part of the agreement, which was signed with Austria’s OMV and Pak-Arab Refinery, better known as Parco, the companies will pursue projects in areas such as plastics production, recycling and cleaner fuels, Mubadala Energy said on Thursday.
“We have set out a clear strategy to pursue new energy sectors and low-carbon solutions in support of the energy transition,” Mubadala Energy's chief executive Mansoor Al Hamed said.
“This agreement brings together existing partners to combine leading technology, energy transition expertise and market infrastructure to realise the potential of circular economy solutions at scale.”
Mubadala Energy, which was previously known as Mubadala Petroleum, has assets and operations in 11 countries, primarily in the Mena region, Russia and South-East Asia.
It reached the production milestone of 500,000 barrels of oil equivalent a day for the first time in June last year, a 22 per cent increase from 2021.
The companies will also explore the development of synthetic oil and chemical products, Mubadala Energy said.
The petrochemicals industry is expected to be a major driver of crude oil demand in the next few decades as consumers increasingly switch to electric vehicles.
Globally, the sector is projected to be worth about $800 billion by 2030, up from about $475 billion in 2020, according to Precedence Research.
Petrochemicals are set to account for more than a third of the growth in oil demand to 2030, and nearly half to 2050, ahead of lorries, aviation and shipping, according to the International Energy Agency.
“Pakistan has immense potential to move towards environmentally friendly fuels,” Parco managing director Shahid Khan said.
Last year, Mubadala Energy said the share of natural gas in its total production increased to 66 per cent in 2021, from 62 per cent in 2020.
Last month, Adnoc said it was acquiring a 24.9 per cent stake in OMV from Mubadala Investment Company.
Through its investment in OMV, which holds a 75 per cent stake in Austrian plastics maker Borealis, Adnoc will increase its stakes in both Borealis and Borouge.
“For OMV, the project supports the company’s net-zero emissions targets and is in line with a strategy to become a leading, innovative producer of sustainable fuels and feedstock,” the state oil company said.
“The sourcing of sustainable raw feedstock and plastic waste is key to our intention to expand sustainable fuel production,” said Martijn van Koten, OMV’s executive officer fuels and feedstock.
“I am convinced that OMV, with its extensive know-how in key sustainable technologies, can make a significant contribution to the success of this co-operation.”