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Asian firms dominate bidding for Abu Dhabi undersea transmission project
US$2 billion plan will connect Adnoc's offshore facilities to onshore electricity grid
Michael Marray 9 Dec 2020

Four bids have been lodged for a high-voltage undersea transmission project that will connect Abu Dhabi National Oil Company’s (Adnoc) offshore oil and gas production facilities to the onshore electricity grid.

The four bidders are China Southern Power Grid, Elia Grid International, Kansai Electric Power, and Kepco of South Korea with EDF of France and Kyuden International of Japan, according to local press reports.

The project will be awarded under a build-own-operate-transfer model, which means it will be transferred back to Adnoc at the end of the concession agreement. It is due to be commissioned in 2025.

A special purpose company will be formed to develop the project, which is estimated to cost around US$2 billion. The successful bidders will own 40% of the company, while Adnoc and Taqa will each hold a 30% stake.

Earlier this year Adnoc and what was then ADPower launched a joint tender for the project, the first of its kind in the Middle East and North Africa region.

ADPower recently completed its integration with Abu Dhabi National Energy Company (Taqa), which is listed on the Abu Dhabi Securities Exchange. The majority of ADPower’s generation, transmission and distribution assets have now become part of Taqa.

Once the subsea transmission network is operational, Adnoc’s offshore oil and gas activites will be able to rely on the onshore grid. Adnoc estimates this will reduce their carbon footprint by up to 30 % since much of the electricity will come from renewable energy sources  – and eventually nuclear power.

“This project will meet our future offshore power needs, even as our fields mature, using diverse and sustainable sources,” Yaser Saeed Al-Mazrouei, Adnoc Upstream executive director, said in April when the tender was launched. “It will enable Adnoc to utilize the natural gas currently used to power our offshore facilities for higher value purposes.”

Power grids

Guangzhou-based China Southern Power Grid constructs and operates power grids in five southern provinces Guangdong, Guangxi, Yunnan, Guizhou and Hainan. It is also active in Vietnam, Laos and Myanmar.

Kansai Electric Power is the electricity utility that serves Japan's Kansai region, including the cities of Kobe, Osaka and Kyoto. Korea Electric Power Corporation (Kepco) is the largest electric utility in South Korea.

Fukuoka-based Kyuden International is involved in gas-fired projects globally, and has plans to generate 5,000MW of electricity overseas by 2030.

Elia Grid is a developer and asset manager for large onshore and offshore infrastructure projects in Europe and the United States. In addition to its activities as transmission system operators in Belgium and Germany, Elia also participates in the Nemo Link,  a joint venture that operates the first subsea interconnector between Belgium (Elia) and the United Kingdom (National Grid). It connects the Richborough (UK) and Herdersbrug (Belgium) converter stations via a 140-kilometre cable (130 kilometres subsea). The interconnector cost 600 million pounds (US$800 million), and has been operational since the first quarter of 2019.

At a meeting in late November, the Abu Dhabi  Supreme Petroleum Council (SPC) approved Adnoc’s capital expenditure plan of AED 448 billion (US$122 billion) for 2021-2025.

On November 11, Adnoc and Total of France announced the delivery of the first unconventional gas from the United Arab Emirates (UAE). The unconventional gas was delivered from the Ruwais Diyab Unconventional Gas Concession located 200 kilometres west of Abu Dhabi. This is an important step towards Adnoc’s target of producing 1 billion standard cubic feet per day (scfd) of gas from the concession before 2030, ultimately enabling UAE to gain gas self-sufficiency.

In July 2020, a consortium of global investors, comprising Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities and Snam, invested $10.1 billion for a collective 49% stake in Adnoc Gas Piplelines.

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