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Abu Dhabi National Oil Co. (Adnoc) announced Thursday it has taken a final investment decision and awarded the build contracts for a gas project expected to produce over 1.5 billion cubic feet per day (Bcfd) at home.
The state-owned energy giant touted the Hail and Ghasha Offshore Development project in the Emirati capital as the world’s first gas production project to have net-zero emissions.
The announcement comes weeks before the United Arab Emirates hosts the United Nations’ main climate forum, for which there have been calls for a global pact to phase down or phase out fossil fuels, and amid a row between producing countries and the International Energy Agency (IEA) over the latter’s claim demand for coal, natural gas and oil could peak by the end of the decade.
The project will reach more than 1.5 Bcfd in output before the end of 2030, according to Adnoc. It will contribute “to UAE gas self-sufficiency and ADNOC’s gas growth and export expansion plans” while aiming “to operate with net zero carbon dioxide (CO2) emissions, reinforcing ADNOC’s legacy of responsible energy production and supporting its Net Zero by 2045 ambition and accelerated decarbonization plan”, Adnoc said in a press release Thursday on its website.
“The project will capture 1.5 million tonnes per year (mtpa) of CO2 taking ADNOC’s committed investment for carbon capture capacity to almost 4 mtpa”, the company said, without disclosing the project’s capital. “The CO2 will be captured, transported onshore and safely stored underground, while low-carbon hydrogen is produced that can replace fuel gas and further reduce emissions. The project will also leverage clean power from nuclear and renewable sources from the grid”.
The project follows Adnoc’s emissions management strategy that involves creating a platform that links all sources of greenhouse gases in company operations with sequestration sites, it said.
Adnoc earlier doubled its target carbon dioxide capture capacity to 10 mtpa by 2030.
A joint venture between the UAE’s National Petroleum Construction Co. and Saipem SPA has bagged one of the two engineering, procurement and construction contracts for Hail and Ghasha. This contract covers offshore facilities including artificial islands and subsea pipelines, the announcement said.
Tecnimont SPA has been tapped for the onshore aspect, including carbon dioxide and sulfur recovery and handling, Adnoc said.
Adnoc noted over 60 percent of the project’s investment “will flow back into the UAE’s economy under ADNOC’s In-Country Value program, reinforcing ADNOC’s commitment to ensuring more economic value remains in the country from the contracts it awards”.
COP28
Adnoc upstream executive director Abdulmunim Al Kindy said in a statement for the announcement, “Natural gas is an important transition fuel and ADNOC will continue to responsibly unlock its gas resources to enable gas self-sufficiency for the UAE, grow our export capacity and support global energy security”.
The issue of striking a balance between energy security and climate goals takes center stage when the UAE gathers countries next month for COP28, or the 28th Conference of the Parties, the decision-making body of the UN Framework Convention on Climate Change. The meeting happens November 30 to December 12 in Dubai. Adnoc chief executive Sultan Al Jaber is president-designate of COP28.
Speaking at the Adnoc-hosted Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), where the contracts for the Hail and Ghasha gas project were signed, Al Jaber expressed support for the Paris Agreement’s goal of limiting the average global temperature rise to 1.5 degrees Celsius relative to pre-industrial levels, in a way that takes into account the planet’s energy needs. “The IPCC [Intergovernmental Panel on Climate Change] has calculated that the world must reduce emissions by at least 43 percent over the next 7 years in order for us to keep 1.5 within reach—that is our North Star”, Al Jaber told ADIPEC, in a speech shared on the COP28 YouTube channel. “It is in fact our only destination. It is simply acknowledging and respecting the science, and we must do this while also ensuring human prosperity by meeting the energy needs of the planet’s growing population”.
The Adnoc boss called for a “systemwide holistic transformation of entire economies that currently run on the equivalent of 250 million barrels of oil and gas and coal every single day”.
“These are barrels that need to be either replaced or decarbonized to create a proper yet responsible pro-growth future”, Al Jaber said. “It is a monumental task—it is also a historic opportunity for growth and innovation”.
Al Jaber went on to express support for an IEA-led call for the tripling of global renewable power capacity by 2030. The target is among several objectives set by a forum on Monday in Madrid attended by Al Jaber, UN Secretary-General Antonio Guterres and ministers and senior officials from 35 countries across five continents, according to a statement by the co-chairs of the Spain summit posted on the IEA website Monday. The summit was co-chaired by IEA executive director Faith Birol and Spain Vice-President Teresa Ribera.
Future of Fossil Fuels
The statement for the Spain conference reiterated the IEA’s earlier report demand for fossil fuels could peak by 2030, defying a protestation by the Organization of Petroleum Exporting Countries (OPEC), which counts the UAE among its top producers.
The IEA report, published September 12, based its projection on the speed of the rollout of clean energy. The report said the acceleration in alternative energy deployment “is encouraging, but not nearly enough for the 1.5 C goal”.
The OPEC issued a counterstatement September 14 saying such narratives “would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world”.
“It is an extremely risky and impractical narrative to dismiss fossil fuels, or to suggest that they are at the beginning of their end”, the OPEC said in the statement posted on its website. “In past decades, there were often calls of peak supply, and in more recent ones, peak demand, but evidently neither has materialized. The difference today, and what makes such predictions so dangerous, is that they are often accompanied by calls to stop investing in new oil and gas projects”.
To contact the author, email jov.onsat@rigzone.com
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