Abu Dhabi National Oil Company (Adnoc) and compatriot Taqa have announced the financial closure of a $3.8 billion contractual award for its Lightning project, which aims to help drive down carbon emissions at the state-owned giant’s offshore oil and gas facilities.

Adnoc confirmed the development on Friday as the consortium led by Korea Electric Power Corporation (Kepco) won the contract to build, own, operate and transfer a giant subsea power transmission system for Lightning.

Adnoc tallied up foreign direct investment of more than $3 billion, combined from commercial lenders, export credit agencies and and the consortium, led by Korea Electric Power Corporation (Kepco) that won the contract for work on a giant subsea power transmission system for Lightning.

The Kepco-led consortium, which also includes Japan’s Kyushu Electric Power and France’s EdF, will operate alongside Adnoc and Taqa, with the full project being returned to Adnoc after 35 years of operation, Adnoc said.

The emirate giant confirmed the contract award last year and said the Lightning project will be funded through a special purpose vehicle, in which Adnoc and Taqa would each hold stakes of 30% stake, with the 40% balance held by the consortium.

Adnoc said the Lightning project “progressed rapidly from concept to development phase with construction starting in early 2022, underscoring both Adnoc and Taqa’s leading positions to drive climate action”, and supporting the United Arab Emirates’ Net Zero by 2050 strategic initiative.

The company said the project, which was initially announced last December, will now have a higher cost of $3.8 billion — on account of higher interest rates — compared to the previously announced $3.6 billion.

Adnoc chief executive Sultan Ahmed al-Jaber said that as “the responsible provider of reliable and low-carbon energy”, his company will continue to work with its partners to advance practical and commercially viable solutions involving the energy transition.

Taqa chairman Mohamed Hassan Alsuwaidi said: “Reaching financial close is an important milestone for this distinctive project, which will see Taqa providing Adnoc offshore facilities with low-carbon energy securely and efficiently through Abu Dhabi Transmission & Despatch Company [Transco’s] power network system.”

Adnoc said earlier that the Lightning project will see the development and operation of a “first-of-its-kind high-voltage, direct current [HVDC] subsea transmission system in the Middle East and North Africa”.

The project will power Adnoc’s offshore production operations with cleaner and more efficient energy, delivered through the Abu Dhabi onshore power grid, owned and operated by Taqa’s transmission and distribution companies, it added.

Adnoc said the subsea development is expected to reduce the carbon footprint of its offshore operations by more than 30%, replacing existing offshore gas turbine generators with more sustainable power sources available on the Abu Dhabi onshore power network.

The subsea transmission system will have a total installed capacity of 3.2 gigawatts and comprise two independent subsea HVDC links and converter stations that will connect to Taqa’s onshore electricity grid, operated by its subsidiary, Transco.

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