Adnoc Gas awards Petrofac $615m deal for one of region’s largest carbon capture projects

More than 65% of the contract value will flow back into the UAE economy, state energy company says

An Adnoc gas refinery. The state oil company has set aside $15 billion to invest in a range of projects to hasten its low-carbon growth strategy. Photo: Adnoc Gas
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Adnoc Gas has awarded a $615 million contract to oil services company Petrofac to build one of the largest carbon capture projects in the Mena region as the state energy company forges ahead with its decarbonisation plan.

The engineering, procurement and construction contract is for carbon capture units, pipeline infrastructure and a network of wells for carbon dioxide injection at the Habshan gas processing plant, Adnoc said in a filing to the Abu Dhabi Securities Exchange on Tuesday.

The project “represents our commitment to significantly reduce greenhouse gas emissions while unlocking new and attractive commercial opportunities for delivering sustainable, lower-carbon growth for the company”, Adnoc Gas chief executive Ahmed Alebri said.

“This large-scale project reaffirms our steadfast commitment to maximising energy output while minimising our emissions, steering us toward a more sustainable and environmentally responsible future.”

The Habshan carbon capture, utilisation and storage (CCUS) project will be able to capture and permanently store up to 1.5 million tonnes a year of carbon dioxide within geological formations deep underground, Adnoc said last month.

CCUS involves the trapping of carbon dioxide emissions from industrial activities such as steel and cement production, as well as from fossil fuel combustion in power generation.

The captured carbon dioxide is transported either by ship or through pipelines and securely stored in subterranean geological formations.

“Integrated carbon capture projects, such as the Habshan CCUS project, are essential building blocks for Adnoc Gas to achieve its decarbonisation goals,” Mr Alebri said.

More than 65 per cent of the contract value will flow back into the UAE’s economy through Adnoc's In-Country Value programme, supporting local economic and industrial growth and diversification, the company said.

The Habshan CCUS project is expected to be commissioned in 2026, according to the bourse filing.

Captured carbon dioxide will be placed in permanent storage in an underground formation at Adnoc Onshore’s Bab Far North Field, located about 241km south-west of Abu Dhabi, the company said.

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“By accelerating plans to make energy cleaner, the UAE is investing in its future,” said Petrofac's group chief executive Tareq Kawash.

The oil services company will “support Adnoc Gas in delivering on their decarbonisation plans, maximising energy output while minimising emissions, and helping to support the UAE’s energy transition”.

Petrofac, which is listed on the London Stock Exchange, designs, builds, manages and maintains oil and gas refining, petrochemicals and renewable energy infrastructure.

The project is expected to triple Adnoc’s carbon capture capacity to 2.3 million tonnes a year, which is equivalent to removing more than 500,000 petrol-powered cars from the road per year, the company said last month.

The project will be built, operated and maintained by Adnoc Gas.

Adnoc, which plans to reach net-zero emissions by 2045, has allocated $15 billion to invest in a range of projects up to 2030, which will help it to hasten its low-carbon growth strategy.

Updated: October 03, 2023, 8:10 AM