An Arab and an American walk into a bar and then decide to drive the global energy transition. Okay, so the collaboration agreement might not technically have taken place in a bar, but this is not a drill. Dubai has officially landed in America to produce the “new oil,” which is one billion ft³ under one specific US state’s ground. This Arab company’s major investment in the US will certainly shake things up in the energy sector.
A major investment by a major Arabian company
The Emirate of Abu Dhabi owns a company that will play a major role in the US energy sector. The company, Abu Dhabi National Oil Company (ADNOC), has become renowned as a wide-ranging energy and oil-and-gas company and has a goal of achieving carbon zero by 2045. ADNOC was founded in 1971 and became a founding member of the Oil and Gas Decarbonisation Charter (OGDC), which consists of over 50 oil and gas companies.
“Looking at sustainability from a triple bottom line approach is something very important for me and for my region, if not globally – ensuring balance for people, planet, and the economy must be at the heart of everything we do.” – Ibrahim Al-Zu’bi, Chief Sustainability and ESG Officer at ADNOC.
To achieve its goals, ADNOC invested a 35% capital stake in ExxonMobil Corporation’s tendered energy facility. The investment was a whopping US$1 billion and aims to drive the global energy transition while lowering hard-to-decarbonise sectors’ greenhouse gas emissions. The American multinational oil and gas company, ExxonMobil, shares the Arabian company’s goal and plans on achieving carbon-zero for operations by 2050. This means this investment is what dreams are made of.
“I think every piece of this business is exciting.” – Darren Woods, ExxonMobil’s Chairman and CEO.
Producing the “new oil” in this US state
ExxonMobil’s headquarters are in the US state of Texas, which is where the newly tendered low-carbon hydrogen and ammonia manufacturing facility will be located as well. The Baytown hydrogen facility was rumored to be the biggest of its kind in the world. The facility will support state-of-the-art carbon capture and storage innovations that can manufacture up to a billion cubic feet of daily low-carbon hydrogen.
This hydrogen is referred to as the “new oil” as it will have nearly 98% of its carbon dioxide taken away and will also result in the manufacturing of over 1 million tonnes of low-carbon ammonia annually. The Baytown hydrogen facility’s final investment was this year, and its startup is anticipated for 2029, all depending on the supportive government policies and required regulatory permits, of course.
“This strategic investment is a significant step for ADNOC as we grow our portfolio of lower-carbon energy sources and deliver on our international growth strategy.” – His Excellency Dr. Sultan Ahmed Al Jaber, the UAE’s Minister of Industry and Advanced Technology and ADNOC’s Managing Director and Group CEO.
Driving the global energy transition and more with this new oil
The world is racing to meet the global energy transition, and hydrogen has become a favorable sustainable energy solution, especially in sectors such as transportation, which have high carbon emissions. The partnership and its project in the Baytown area include benefits, such as:
- Valuable economic benefits to Baytown, Houston, and Texas overall
- Local job creation
- Support for community development initiative
- Meeting the ever-rising demand for lower-carbon fuels
“This agreement represents a significant investment in the United States’ energy production and the global energy transition. It will help reduce greenhouse gas emissions across hard-to-decarbonise sectors, including industry, energy and transportation.” – says Dr. Sultan.
Texans know to go big or go home, and this major investment from ADNOC will help establish Texas as a major hydrogen hub in the US and potentially drive the global energy transition to sustainable energy.
Article Credit: ecoportal