The UAE’s energy heavyweight Abu Dhabi National Oil Company (ADNOC), in partnership with Italy’s Eni and Thailand’s PTT Exploration and Production Public Company (PTTEP), has secured a structured financing transaction of up to $11 billion (AED 40.4 billion) for its multibillion-dollar big sour gas development, which is set on becoming the world’s first project to operate with net-zero emissions.
The signing of the structured financing is expected to monetize Hail and Ghasha ’s midstream future gas production, which is part of the larger Ghasha Concession offshore Abu Dhabi that is expected to produce 1.8 billion standard cubic feet per day (bscfd) of gas.
This is described as the world’s first offshore gas project of its kind that aims to operate with net zero emissions, capturing 1.5 million tonnes per year (mtpa) of carbon dioxide (CO2), equivalent to removing over 300,000 cars off the road every year.
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Dr. Sultan Ahmed Al Jaber , UAE’s Minister of Industry and Advanced Technology and ADNOC’s Managing Director and Group CEO, commented: “This landmark transaction builds on ADNOC’s successful track record of global energy partnerships and unlocks capital to drive progress at Hail and Ghasha, one of the world’s most ambitious offshore gas projects.
“The exceptional demand from over 20 leading global and regional financial institutions reinforces confidence in ADNOC’s value creation strategy, innovative approach to financing, and expertise in delivering mega projects.
“Hail and Ghasha is an important contributor to ADNOC’s gas strategy and is on track to generate significant value for ADNOC, our partners, and the UAE, while unlocking important new gas resources for our customers.”
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The non-recourse financing transaction is perceived to enable ADNOC to realize upfront value for its products at competitive rates, while introducing an innovative commercial model that ring-fences midstream processing facilities and operations, which enables the firm and its partners to raise low-cost funding and retain strategic and operational control of the assets.
The financing structure for Hail and Ghasha is said to offer a replicable model for large-scale greenfield projects. The UAE giant’s latest financing model follows a series of midstream and infrastructure transactions, including a $4.9 billion (AED18 billion) oil pipeline partnership, and a $10.1 billion (AED 37.1 billion) gas pipeline agreement.
The most recent financing milestone comes in the wake of build-own-operate-transfer (BOOT) projects, such as the $3.8 billion (AED14 billion) project to power and decarbonize offshore operations and the $2.2 billion (AED8.3 billion) project to deliver sustainable water supplies to onshore operations.