Abu Dhabi National Oil Company (ADNOC) and Masdar on Sunday signed a joint venture agreement to create the Middle East's first company focused on exploring and developing commercial-scale projects for carbon capture, usage and storage (CCUS).
ADNOC and Masdar said in a statement that it has awarded a AED450m engineering, procurement and construction contract to Dodsal Group to build a carbon dioxide compression facility and a 50km pipeline.
The joint venture is 51 percent owned by ADNOC and 49 percent by Masdar, the statement added.
The first CCUS project will capture CO2 onsite at Emirates Steel, the UAE's largest steelmaker's facility. It will be compressed and transported along the 50 km pipeline to oil fields operated by ADNOC before ADNOC injects it into oil fields to enhance oil recovery.
The project will sequester up to 800,000 tonnes of CO2 annually. Completion is slated for 2016.
"The implementation of this technology is a demonstration of Masdar and ADNOC's commitment to decarbonising the UAE's growing economy," said Dr Sultan Ahmed Al Jaber, CEO of Masdar, Abu Dhabi's renewable energy company.
"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 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.
The joint venture is the first phase of an industrial-scale CCUS network planned as part of Abu Dhabi's commitment to decarbonise its economy and create a low-carbon power generation industry.
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.