KUALA LUMPUR (March 15): The move by Petroliam Nasional Bhd's (Petronas) green energy arm Gentari Sdn Bhd to invest in the Hai Long offshore wind project off the Changhua coast in the Taiwan Straits, is for the group to learn how to develop offshore wind energy as it looks to progress in its energy transition strategy, according to Petronas president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz.

While he acknowledged that the current interest rates environment has made it "extremely difficult" for renewable energy players in general, Taufik is confident that the investment would be favourable to the group in the long run.

"In the context of Hai Long, this is being delivered with an experienced partner, Northland Power Inc. We took a 49% stake because we need to know how to develop offshore wind. This is in fact a sizeable player in Asia Pacific which has already pre-contracted much of the contract content, I believe it's in the north of 80%-85% that has already been pre-locked in its costs. So now our challenge is delivery," he told reporters at a media briefing on Friday.

"We take note that there is volatility but I believe in anything offshore there's always going to be claims and also counter claims around who owns what. We will apply the necessary mitigations," Taufik added.  

Gentari, through subsidiary Gentari International Renewables Pte Ltd, in December 2023 took up a 49% stake in Canada-based Northland Power’s ownership of the Hai Long project, equivalent to a 29.4% indirect equity interest.

Northland holds a 30.6% ownership interest in the overall project and continues to take the lead role in the construction and operation of the project developed as a joint venture between Northland and Japan-based Mitsui & Co.

Comprising two phases, the project has an expected combined generating capacity of 1,022 MW and is expected to play an important role in helping Taiwan achieve its renewable energy target of 15 GW of offshore wind to be constructed between 2026 and 2035.

Once operational, Hai Long will be the largest offshore wind project surrounding the island, besides being one of the largest offshore wind facilities in Asia, providing enough clean energy to power more than one million households as well as industrial facilities in Taiwan.

Taufik added that Petronas is doubling down on emissions abatement in its core business and pursuing cleaner energy solutions. He said Petronas has developed a clear strategy for the energy transition. This strategy aims to ensure a balanced approach in offering emissions-abated solutions while it lays the foundation for a new energy system.

“Across the group, we are making progress in meeting our near-term target of capping emissions at 49.5 million tCO2e (tonnes of CO2 equivalent) by 2024 in our domestic operations. As we look ahead, Petronas remains determined to continue improving our delivery as a progressive energy and solutions partner,” he said.

Gentari’s global aspiration includes building 30 to 40 GW in renewable energy capacity by 2030 through projects across solar, onshore and offshore wind and battery storage, targeting utility-scale, commercial, industrial and retail customers.

Read also:
Petronas posts lower FY2023 earnings as 4Q profit drops 32%, plans RM32b dividend for FY2024
Petronas confirms scaling down operations in Mexico but yet to decide on a full exit
Petronas sets capex at RM50b-RM60b for FY2024
Petronas CEO sees oil price 'correction' in 2024
LNG Canada to make first shipment by the end of this year, says Petronas CEO