ADNOC and TAQA secure long-term utilities deal to accelerate UAE's industrial diversification

ADNOC and Abu Dhabi National Energy Company PJSC (TAQA) have completed a 27-year utilities purchase deal intended to support the TA’ZIZ Industrial Chemicals Zone in Ruwais. This long-term agreement involves both companies, two government-linked energy entities, working together to develop the essential utilities infrastructure needed for large-scale chemicals and transition-fuels manufacturing at the site. As ADNOC explained in a statement, the contract covers not just the building of the utilities plant but also the off-take of its output.

Under this arrangement, ADNOC and TAQA will provide a package of services that includes connecting to the electricity grid, steam generation, process cooling, and a variety of water and wastewater systems. The joint venture behind TA’ZIZ, which involves ADNOC and ADQ, plans to establish and operate a dedicated service management company that will be the sole off-taker of these utilities. According to ADNOC’s announcement, this deal marks a significant step toward developing the entire TA’ZIZ ecosystem.

The project is already being set up as a key driver of industrial diversification for the UAE. The partners project that by 2028, the complex will produce around 4.7 million tonnes per year (MTPA) of chemicals and transition-fuels. This includes outputs like methanol, low-carbon ammonia, PVC, ethylene dichloride (EDC), vinyl chloride monomer (VCM), and caustic soda. Additionally, the plans highlight a broader infrastructure development, such as a dedicated chemicals port and numerous major EPC contracts to boost manufacturing capacity at Ruwais.

TAQA’s Generation division framed the deal as an important expansion of its role in supplying power and utility services across the region. “This agreement enhances TAQA’s position in enabling industrial growth in the UAE by providing reliable and efficient utility infrastructure to support TA’ZIZ’s chemicals and transition-fuels production,” said Farid Al Awlaqi, CEO of TAQA’s Generation business. He also noted that the partnership with ADNOC would help diversify Abu Dhabi’s economy and contribute to GDP growth.

Meanwhile, Mashal Al-Kindi, the CEO of TA’ZIZ, called the contract a crucial milestone for the program’s broader ambitions. “This multi-year agreement with TAQA is a key step forward in realizing TA’ZIZ’s long-term vision, fostering sustainable growth, and strengthening the UAE’s industrial base,” she said, underlining how vital dependable utilities are for attracting large-scale chemicals and transition-fuels producers.

ADNOC also used the opportunity to reaffirm a strategic message from its leadership. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC’s Managing Director and Group CEO, encouraged industry players to focus on structural demand rather than short-term market fluctuations. He emphasized the importance of “looking beyond volatility to seize the transformative opportunity presented by rising global energy demand,” according to ADNOC’s release.

While the duration and technical scope of the utilities agreement are quite clear, neither side has disclosed specific financial details. ADNOC’s public materials mention a significant corporate investment plan in lower-carbon solutions, initially allocating about $23 billion toward new energies and decarbonization tech. Separately, TA’ZIZ revealed it has awarded major contracts, including over $2 billion for infrastructure at the site and nearly $2 billion for a world-class PVC complex through an EPC contract.

In addition, logistical investments are also underway. ADNOC Logistics & Services and TA’ZIZ announced a 50-year agreement to create a dedicated chemicals port at Ruwais. TA’ZIZ reports this facility, valued at over $300 million, will support exports of low-carbon ammonia and methanol, aiming for completion by late 2026. They expect the port to generate substantial revenue during its initial years of operation.

This utility agreement is closely tied to the manufacturing and export strategies of TA’ZIZ. Large chemical production obviously relies on a continuous, high-quality supply of power, steam, and process cooling. Centralizing utility services can cut down on duplicated infrastructure and potentially improve operational efficiency for tenants. TA’ZIZ’s approach, channeling utilities through a single service management firm, is designed to provide consistent, industrial-grade services to the site operators.

For the UAE’s climate-tech sector, the project presents both opportunities and challenges. On the one hand, TA’ZIZ and its partners promote low-carbon product lines and investments in emissions reduction tech. On the other hand, giant chemical plants are resource-intensive and energy-heavy. The extent to which the utilities incorporate low-carbon fuels, waste heat recovery, electrification, and water-saving measures will significantly influence the hub’s overall environmental impact. ADNOC’s larger strategy emphasizes efforts to reduce the carbon footprint of its upstream oil and gas operations, while investing in new energies; meanwhile, TA’ZIZ underscores localization and adding value within the country’s economy.

The deal also fits into TAQA’s regional expansion ambitions in power generation. The company lists several major projects, such as the 1-gigawatt Al Dhafra gas turbine project in the UAE and new efficient power plants in Saudi Arabia developed alongside partners. These assets position TAQA well to provide both steady baseload power and flexible capacity to industrial clients.

By locking utilities into a multi-decade contract, TA’ZIZ and its partners aim to give enough certainty to attract international chemicals manufacturers and downstream investors. If all goes as planned, this integrated approach might speed up the UAE’s goal of developing a local, low-carbon chemicals supply chain and boosting industrial resilience. But, of course, the overall environmental benefits and long-term sustainability will depend heavily on the technical choices made in designing and operating the utilities infrastructure, how much of the process actually incorporates low-carbon fuels, waste heat recovery, electrification, water efficiency, these are the details that will determine how much of the greener future the project can deliver.

Source: Noah Wire Services