The Spanish company is in talks with Adnoc and Masdar as it pursues its low-carbon energy strategy in Europe
Cepsa is leveraging its relationship with Mubadala Investment Company and is in talks with Abu Dhabi National Oil Company and Masdar on potential co-investments and partnerships as it pursues its low-carbon energy strategy in Europe, its chief executive has said.
The Spanish oil and gas company, which is majority owned by Abu Dhabi’s strategic investment fund Mubadala, is in talks with state-owned energy producer Adnoc for a green hydrogen partnership, Maarten Wetselaar told The National in an interview.
The potential tie-up can take the form of joint investments in developing the entire hydrogen value chain from the Middle East to Europe and North Africa. Another option is Cepsa focusing on building demand and infrastructure in Spain and other parts of Europe as Adnoc remains focused on hydrogen production, he said.
“We are actually discussing exactly that question with Adnoc at the moment,” Mr Wetselaar said. “The biggest value add that we can have is to offer market access. We have customers in Spain, we can develop customers in the rest of Europe.”
Both approaches can work, however, it is a “little bit early” to say how its potential partnership with Adnoc will be formed, he said, adding that Cepsa’s “unique contribution” lies more in Spain and continental Europe. “I think that’s the starting point.”
Cepsa, which also counts the Carlyle Group as its shareholder, will be “absolutely willing” to bring its expertise and knowledge to Abu Dhabi to work together with Adnoc, Mr Wetselaar said.
“I don’t think there’s a lack of capital in Abu Dhabi, although we would be willing to bring our capital … to build those value chains together from Abu Dhabi into Europe, into North Africa and from North Africa into Europe … a major opportunity that we would be very keen to work [on] together.”
Hydrogen, which can be produced from both renewable energy and natural gas, is expected to play a key role in the coming years as economies and industries transition to a low-carbon world to mitigate the effects of climate change.
Green hydrogen is produced from renewable sources while natural gas produces blue and grey hydrogen.
An investment of about $600 billion in low-carbon hydrogen will be required by 2050 to meet rising demand for the green fuel, Wood Mackenzie has said. Globally, the size of the hydrogen industry is expected to hit $183bn by 2023, up from $129bn in 2017, Fitch Solutions has said. French investment bank Natixis estimates that investment in hydrogen will exceed $300bn by 2030.
Demand for low-carbon hydrogen globally is set to surge to 223 million tonnes by 2050 from less than 1 million tonnes currently, according to Wood Mackenzie estimates.
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