Adnoc and Taqa announce $2.4bn sustainable water supply project

Partners will hold a 51% stake in project company, with remainder awarded to consortium of Orascom Construction and Metito

The project will be connected to the grid and will receive all its power from clean energy sources. Photo: Adnoc

Adnoc and Abu Dhabi National Energy Company, better known as Taqa, have announced a $2.4 billion project to provide sustainable water supply to Adnoc’s onshore operations, as part of efforts to decarbonise operations.

The project will develop a centralised seawater treatment facility and transportation network for operations at the Bab and Bu Hasa fields in Abu Dhabi, the companies said in a statement to the Abu Dhabi Securities Exchange on Wednesday.

Adnoc and Taqa will jointly hold a 51 per cent majority stake – 25.5 per cent each – in the project company, with the remaining 49 per cent stake awarded to a consortium of Orascom Construction and Metito.

The consortium will arrange the project financing for the construction phase and develop the project under a build, own, operate and transfer model.

The full project will be returned to Adnoc after 30 years of operation, the companies said.

The strategic project will “reduce our environmental footprint and unlock significant value as we continue to decarbonise and future proof our operations”, said Abdulmunim Al Kindy, Adnoc Upstream executive director.

“The project will enhance our onshore energy efficiency by replacing less-efficient high-salinity, deep aquifer water systems with a centralised seawater treatment facility and transportation network.”

The project will be connected to the grid and will receive 100 per cent of its power from clean energy sources.

It will reduce water injection related energy consumption by up to 30 per cent, the companies said.

Adnoc has taken several measures to reduce its carbon emissions as it seeks a 25 per cent reduction in its greenhouse gas intensity by 2030.

In January, the company said it would invest $15 billion in decarbonisation projects by the end of this decade. Elements include clean power, carbon capture usage and storage (CCUS), further electrification of operations, carbon dioxide absorption technology and energy efficiency.

The company will also take measures to continue pursuing its policy of zero-routine gas flaring, it said at the time.

In December, the state energy company also set up a new low-carbon solutions and international growth business division which will focus on renewable energy, clean hydrogen and CCUS, as well as international expansion in gas, liquefied natural gas and chemicals.

In September, Adnoc and Taqa also closed a $3.8 billion strategic project to power and decarbonise Adnoc's offshore production operations.

A consortium comprising Korea Electric Power Corporation, Kyushu Electric Power Company and Electricite de France, will build, own, operate and transfer the high-voltage direct current sub-sea transmission system alongside Adnoc and Taqa, the companies said at the time.

The development is expected to reduce the carbon footprint of Adnoc's offshore operations by more than 30 per cent, replacing existing offshore gas turbine generators with more sustainable power sources from the Abu Dhabi onshore power network.

The latest project will deliver more than 500 million litres per day of nano filtered seawater through 75 kilometres of transportation and over 230km of distribution pipelines and two pumping stations, to supply Adnoc’s onshore operations.

The project will “advance the UAE’s sustainability goals”, said Jasim Thabet, Taqa’s group chief executive and managing director.

“As a major utility, Taqa is especially committed to partnerships like this that use our expertise to help drive environmental stewardship while maintaining water security and supporting economic growth.”

More than 60 per cent of the project value during the development and operation phases will flow back into the UAE’s economy under Adnoc's In-Country Value programme.

“With a substantial portion of the project value flowing back into the UAE economy, this landmark initiative will further stimulate economic and industrial growth and create commercial opportunities for the private sector,” said Mr Al Kindy.