Eni, ADNOC ink pact to cooperate in renewables, hydrogen, carbon capture

Italy's Eni and the UAE's Abu Dhabi National Oil Co. have signed a memorandum of understanding to explore collaboration in the development of renewable energy, blue and green hydrogen and carbon, capture and storage amid ADNOC's plans to hit net zero scope 1 and scope 2 emissions by 2050.

The two companies also will explore collaboration in the reduction of greenhouse gas, methane emissions, and routine gas flaring, Eni said in a March 4 statement.

ADNOC plans to spend $15 billion on clean energy projects by 2030 as it seeks to decarbonize its operations. It has pledged to lower its carbon intensity by 25% by 2030 and has set an upstream methane intensity target of 0.15% by 2025.

At the same time, ADNOC is boosting its oil production capacity to 5 million b/d by 2027 from over 4 million b/d now and will spend $150 billion between 2023-2027 to help fund this ramp-up.

Eni also plans to boost its upstream production, which will grow at an average of 3%-4% per year from about 1.61 million b/d of oil equivalent in 2022 with output plateauing in 2025 to 2030.

Despite the higher output guidance, Eni is sticking with targets to reduce its scope 1, 2 and 3 emissions by 35% by 2030 and by 80% by 2040 ahead of hitting net zero emissions by 2050.

The UAE, OPEC's third biggest producer, has pledged to have net zero emissions by 2050, the first country in the Middle East to make such a commitment. It will be hosting the UN Climate Change Conference (COP28) in November.

Carbon capture projects

ADNOC already plans to boost its carbon capture and storage capacity to 5 million mt/year by 2030 from 800,000 mt/year now.

It is also developing with partners a 1 million mt/year blue hydrogen project in the industrial hub of Ruwais in the emirate of Abu Dhabi.

Through its stake in Abu Dhabi-based renewables firm Masdar, ADNOC will be involved in the company's projects, including plans to develop as much as 1 million mt/year of green hydrogen by 2030 and boost installed renewables power capacity to as much as 100 GW by 2030 from over 20 GW now.

Eni is working with ADNOC to build a carbon capture and storage plant and an enhanced oil recovery project in the Bab field.

Eni pumped 17 million barrels of oil and condensate and produced 6 bcf in the UAE in 2021 according to its website

Eni is in talks with the ADNOC to speed up the development of gas projects, including the Ghasha sour gas development, and the recent discovery in Offshore Block 2 off Abu Dhabi, according to a September statement.

Eni's UAE concessions

Production from the Ghasha concession, the world's largest offshore sour gas development, is expected to start around 2025 and ramp up to reach more than 1.5 bcf/d before the end of the decade.

The Ghasha concession comprises the Hail, Ghasha, Hair Dalma, Satah, Bu Haseer, Nasr, SARB, Shuwaihat and Mubarraz fields. ADNOC's partners in the Ghasha concession are Eni (25%), Germany's Wintershall Dea (10%), Austria's OMV (5%), and Russia's Lukoil (5%).

Eni also has a 70% stake and is operator of Offshore Block 2, with partner PTTEP of Thailand holding the remaining interest.

The Italian major is the operator of three exploration concessions in the UAE and has a participation with ADNOC in three offshore development and production concessions, Lower Zakum (5%), Umm Shaif and Nasr (10%) and Ghasha (25%).

Eni also owns 20% of ADNOC Refining, a joint venture with ADNOC and Austria's OMV. It also has a 20% stake in ADNOC Global Trading, a joint venture with ADNOC and OMV focused on refined products.