A few days ago, the UAE proposed a new national strategic plan with the goal of “strengthening the status of the energy hub in the Gulf region” and stated that it will reshape the energy sector through measures such as further expanding oil trade, broadening oil export channels, and strengthening the renewable energy industry. Subsequently, the country’s main energy companies-Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company (TAQA) have successively put forward the latest business plans to maximize the adjustment of the national energy industry.
Reshaping the energy industry
It is understood that the new energy strategy launched by the UAE is called the “Dh300 billion Operation”, which aims to increase the output value contribution of the UAE’s industrial sector from the current AED 133 billion to AED 300 billion in the next 10 years ( About 81 billion U.S. dollars). The UAE official stated that this goal will be largely achieved by creating 13,500 industrial companies, which cover electricity, natural gas, mining, and manufacturing.
The Gulf News article pointed out that, in fact, at the end of March, the UAE officially launched the Murban crude oil futures contract transaction to lead the “Dh300 billion Operation” to attract more oil trading contracts and strengthen the UAE as a Gulf region. The status of an oil export hub.
It is worth noting that the creation of new oil export channels will be a major task for the UAE’s oil sector. Sheikh Mohammed, Vice President and Prime Minister of the UAE, stated that the move is aimed at completely bypassing the disputed Strait of Hormuz to export oil, and the status of Fujairah Port in the Gulf of Oman will be further enhanced.
It is understood that at present, the UAE can partially bypass the Strait of Hormuz and transport 1.5 million barrels of oil daily to Fujairah Port through the 360-kilometer Abu Dhabi crude oil pipeline. Last year, Saudi Arabia, Iraq, Kuwait and the United Arab Emirates transported nearly 12 million barrels of crude oil and condensate a day through the Strait of Hormuz.
According to Gulf News, the UAE is planning to develop an underground oil storage cave near Fujairah Port with a capacity of approximately 42 million barrels, which is expected to be completed in 2022. In addition, a 10th berth will be added to Fujairah Port, aiming to increase the total inventory of the port to 17 million cubic meters in the next 3-4 years.
Further encourage oil and gas development
Based on the “300 billion dirham action” strategy, ADNOC has also recently made a decision to consider listing its drilling subsidiary ADNOCDrilling in the UAE. According to Reuters news, ADNOC hopes to complete ADNOCDrilling’s initial public offering (IPO) this year, and the scale of fundraising is expected to exceed $1 billion.
At present, the company’s negotiations with the bank are still at an early stage. If the negotiations go smoothly, this will be the second subsidiary of ADNOC to be listed on the Abu Dhabi Stock Exchange. At the end of 2017, ADNOC’s fuel retail subsidiary, ADNOC Distribution, had an IPO on the Abu Dhabi Stock Exchange, when the subsidiary was valued at US$8.5 billion.
It is understood that ADNOCDrilling is the largest drilling company in the Gulf region, operating 63 onshore drilling platforms, 20 offshore jack-up drilling platforms, and providing drilling rigs and other related services. ADNOC CEO Sultanal-Jaber said: “The UAE’s new strategic plan and our recent discovery of conventional and unconventional oil resources will help increase our production.”
In recent years, ADNOC has gradually begun to decentralize its business, including the sale of minority stakes in the pipeline business, the establishment of joint ventures in the upstream and downstream, etc. Last year, it also reached the largest energy infrastructure investment in the Gulf region, and its core business is gradually being “monetized”. Attract foreign investment and maximize the value of assets.
As part of the UAE’s “Circular Economy Policy 2021-2031”, the “AED 300 billion Action” is actually an aid to the sustainable development of the country’s energy sector. According to the “Circular Economy Policy 2021-2031”, ADNOC will further increase oil production by 2030 from the current 4 million barrels per day to at least 5 million barrels per day.
Strengthen solar power generation
ADNOC is responsible for the reshaping of the UAE’s oil and gas industry, and TAQA is responsible for the development of the UAE’s renewable energy industry.
According to the “Financial Times” report, TAQA has introduced new sustainable development goals, which will further strengthen the position of solar energy in the field of renewable energy.
Based on the new sustainable development strategy, TAQA’s goal is to increase the proportion of renewable energy in its energy business from the current 5% to 30% by 2030; the domestic power generation capacity will increase from the current 18 GW to 30 GW; at the same time, it will announce its own carbon emission reduction targets and measures in the second half of the year.
Statistics from the industry consultancy Resta Energy show that last year, the UAE had 2.3 gigawatts of renewable energy installed capacity, accounting for 7% of its total installed capacity, the most important of which was solar energy.
“The latest goal is consistent with the general direction of the country’s renewable energy development. In the next step, we will increase clean energy assets on a larger scale, especially solar energy. We will not only develop more projects locally, but also involve overseas projects.” Jasim Husain Thabet said, “We hope to transform TAQA into a leading company in the UAE’s low-carbon sector and help the UAE energy industry achieve sustainable strategies.”
It is reported that the UAE plans to increase the proportion of clean energy in the energy structure to 50% by 2050, of which 44% comes from wind and solar energy, and 6% comes from nuclear energy.
At present, TAQA puts more energy into two local solar power projects-NoorAbuDhabi Solar Park and AlDhafra Solar Project. NoorAbuDhabi Solar Park is located in the eastern part of Abu Dhabi. It covers an area of 780 hectares and has a total installed capacity of 1.2 GW. Construction started in May 2017 and commercial operation was realized in April 2019. It can provide sufficient supply for 90,000 local households. Electricity, and reduce carbon dioxide emissions by 1 million tons.
The AlDhafra solar project was jointly built by TAQA and Abu Dhabi renewable energy developer Masdar, with an installed capacity of 2 GW and a hydrogen demonstration plant. Currently, the project is progressing smoothly and is expected to be put into operation in 2022. By then, it is expected to have the world’s most competitive solar feed-in tariff, which can provide electricity to 160,000 local households, which is equivalent to reducing the emissions of 470,000 vehicles.