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Adnoc issues $615m contract for carbon capture project

US company CarbonCapture builds direct air capture machines that remove carbon dioxide from the atmosphere Reuters/Tim Wimborne
US company CarbonCapture builds direct air capture machines that remove carbon dioxide from the atmosphere

Adnoc Gas, a subsidiary of oil major Adnoc, has awarded a $615 million (AED2.26 billion) engineering, procurement and construction contract to Petrofac Emirates, a unit of the UK-headquartered oil services firm.

The contract, for Middle East and North Africa’s largest integrated carbon capture project, includes constructing carbon capture units, pipeline infrastructure and a network of wells for CO2 injection at the Habshan gas processing plant.

The contract was announced in a statement issued on the Abu Dhabi stock exchange.

The Habshan carbon capture, utilisation and storage (CCUS) project will be able to capture and permanently store 1.5 million tonnes per annum (mtpa) of CO2 in the subterranean rock below the site.

Adnoc will build a platform to connect sources of emissions and sequestration sites. Adnoc Gas will be responsible for building, operating and maintaining the project.

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

The project is expected to be commissioned in 2026. CO2 will be injected and placed for permanent storage in Adnoc Onshore’s Bab Far North Field, located southwest of Abu Dhabi. 

The Habshan CCUS project is expected to treble Adnoc’s carbon capture capacity to 2.3 mpta, equivalent to removing over 500,000 gasoline-powered cars from the road annually.

The company’s first Al Reyadah facility can capture up to 800,000 tons of CO2 per year.

Adnoc, the UAE’s biggest oil producer, has announced plans to capture 10 million tonnes of carbon dioxide emissions annually by 2030, up from a previous target of five million tonnes.

The announcement was made on Sunday, ahead of Adnoc hosting its main annual oil conference, Adipec, this week and as the country prepares to host the UN Cop28 summit in November and December this year. 

The Abu Dhabi company plans to invest an initial $15 billion in decarbonisation projects.

Elsewhere in the region, Saudi Arabia aims to raise its CCUS capacity to 44 mtpa by 2035, according to a May 2023 report by The King Abdullah Petroleum Studies and Research Center.

The broader Middle East is home to nearly 5 percent of announced CCUS projects worldwide and is ranked fifth in terms of planned and operational CCUS facilities, according to a report by energy consultancy Rystad.

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