ABU DHABI Delays in winning approvals on pricing and scheduling of a carbon capture and storage (CCS) project are holding up a $2.5 billion hydrogen power venture by BP and an Abu Dhabi firm, an official document showed.
Abu Dhabi green energy company Masdar said in January that its 60-40 hydrogen power venture with BP would be delayed, without giving reasons other than it was awaiting government approvals.
A bond prospectus from Masdar parent company Mubadala, seen by Reuters, said: "The project is expected to cost $2.5 billion but until Masdar can obtain certainty, both in relation to the pricing for and the scheduling of, the offtake of the CO2, further development of this project has been put on hold."
The project is expected to produce and sell some 2,000 gigawatt (GW) hours of power per year to Abu Dhabi Water & Electricity Company (ADWEC) and 1.7 million tonnes of CO2 per year to the Abu Dhabi Company for Onshore Oil Operations (ADCO).
But pricing for the CO2 and electricity is not yet resolved, causing delays, a source told Reuters.
Masdar's $280 million CCS project will be approved in the second quarter of 2011, said the prospectus from Mubadala, an Abu Dhabi investment vehicle.
The project will involve capturing 0.8 million tonnes of CO2 per year from an Emirates Steel Industries plant in Abu Dhabi and transporting it through a pipeline network for injection into Abu Dhabi's reservoirs for enhanced oil recovery.
(Reporting by Stanley Carvalho; editing by Jason Neely)