Abu Dhabi, UAE: November 10, 2013 – Abu Dhabi National Oil Company (ADNOC) and Masdar today signed a joint venture agreement – the Middle East’s first company focused on exploring and developing commercial-scale projects for carbon capture, usage and storage (CCUS). ADNOC and Masdar jointly awarded a AED 450 million engineering, procurement and construction (EPC) contract to Dodsal Group to build a carbon dioxide (CO2) compression facility and a 50 km pipeline. The joint venture is 51 percent owned by ADNOC and 49 percent by Masdar.
Located in Abu Dhabi, the capital of the United Arab Emirates (UAE), the joint venture’s first CCUS project consists of three core components. First, CO2 will be captured onsite at Emirates Steel, the UAE’s largest steelmaker’s facility. Second, the CO2 will be compressed and transported along the 50 km pipeline to oil fields operated by ADNOC. Third, ADNOC will inject the CO2 into oil fields to enhance oil recovery, while storing the injected CO2 underground. The project will sequester up to 800,000 tonnes of CO2 annually. Completion is set for 2016.
“The implementation of this technology is a demonstration of Masdar and ADNOC’s commitment to decarbonising the UAE’s growing economy,” said H.E. Dr. Sultan Ahmed Al Jaber, CEO of Masdar, Abu Dhabi’s renewable energy company.
“We are proud to be pioneering the use of CCUS technology in the region, a critical strategy to reduce global carbon emissions,” added H.E. Dr. Al Jaber. “We hope this project will serve as a proof of concept and encourage other hydrocarbon-rich nations to adopt similar technologies to reduce their carbon emissions.”
The UAE has traditionally used hydrocarbon gases in some of the Abu Dhabi fields to enhance oil production. However, with the nation’s rise in its energy demand, this CCUS project will allow the UAE to preserve its natural gas for domestic electricity generation.
“The UAE is a responsible hydrocarbon producer,” said H.E. Abdulla Nasser Al Suwaidi, Director General of ADNOC. “We believe CCUS has tremendous potential to both reduce our carbon footprint and enhance our oil and gas production. We are committed to finding and adopting real-world solutions that have economic and environmental returns.”
In 2009, ADNOC became the first national oil company in the region to pilot CO2 injection in collaboration with Masdar.
“ADNOC has always been a pioneer,” added H.E. Al Suwaidi. “We have a tradition of applying cutting-edge, proven technologies to ensure sustainable supplies of hydrocarbons to local and international markets. By capturing, using and storing the CO2, we not only cut down on emissions, but add opportunities for increasing our oil and gas production, which can be sold internationally or used for domestic energy generation.”
The joint venture is the first phase of an industrial-scale CCUS network planned as part of Abu Dhabi’s commitment to decarbonize its economy and create a low-carbon power generation industry. It will also collaborate with ADNOC’s Petroleum Institute and Masdar’s Institute of Science and Technology in developing leading edge technologies to optimize CO2 management in Abu Dhabi.
“CCUS presents a viable technology for energy-intensive industries to lower their carbon footprint,” said Engineer Saeed G. Al Romaithi, CEO of Emirates Steel. “By capturing and eventually storing our CO2 stream, Emirates Steel sets an example of supporting Abu Dhabi’s sustainability objectives through operating environmental friendly heavy industries within the emirate of Abu Dhabi.”
Carbon capture solutions are often cited as a critical strategy for climate change mitigation. According to the International Energy Agency (IEA), up to 20 percent of global CO2 emissions will need to be mitigated by carbon, capture and storage projects in the power and industrial sectors by 2050. To meet this goal, the IEA estimates that 100 carbon capture projects would have to be developed by 2020 and over 3,000 by 2050, requiring an investment of an estimated US$ 3 trillion by 2050.
“With energy demands surging to unprecedented levels, along with greenhouse gas emissions, the Middle East must adopt clean technologies, renewable energy and carbon mitigation solutions,” added H.E. Dr. Al Jaber. “Through collaboration between ADNOC and Masdar, the UAE is developing a blueprint for how to incubate and establish a low-carbon, new-energy industry in the region.”