This will be on the agenda for talks when Saudi Energy Minister Prince Abdulaziz bin Salman travels to New Delhi for a one-day visit on Friday to prepare the ground for the Prime Minister’s trip. Saudi Arabian and Crown Prince Mohammed bin Salman in India next month.
Taking the conversation beyond oil exports, informed sources said the two sides are likely to start discussions on an undersea cable for a power grid involving South Asia and the Gulf countries. Both are studying the commercial viability of such a project.
Abu Dhabi can also join
If India agrees, the Abu Dhabi government could also join the ambitious project, which could have capital costs of between $15 billion and $18 billion, according to industry estimates. However, these figures are not definitive, warned the people quoted above.
The Saudi Ambassador to India has already invited leading conglomerates such as Tata Group, Reliance Industries Ltd, JSW and Adani among others for their views. India will be the Crown Prince’s first stop on a trip that will take him to Indonesia, South Korea and Japan.
The distance from the coast of Gujarat (port of Mundra) to the emirate of Fujairah across the Arabian Sea is 1,600 km. Alternatively, the cable could also pass through Oman (1,200 km), the deepest point being 3.5 km. According to people familiar with the matter, oil and natural gas officials conducted a feasibility study three years ago, but the project is only now moving forward, with Prime Minister Narendra Modi pushing the International Solar Alliance .
“The plan is to have two-way power flow in 15-minute blocks,” the CEO of a power transmission company said on condition of anonymity. “Interconnectors will solve the intermittency problem associated with wind or solar power.”
According to industry experts, a 3 GW subsea project would involve capital expenditure of $5 billion, which includes the cost of cables (copper or aluminum), installation vessels and terminals at both ends, but anything less than 10 GW will be undersized.
The Ministry of Foreign Affairs, Tata, RIL, JSW and Adani did not respond to questions.
“India and Saudi Arabia are in the same position – a young population and among the fastest growing economies,” said Anshuman Mishra, a member of the Future Investment Initiative at the Saudi Public Investment Fund (PIF). “A handshake between the booming Gulf and vibrant India will help put Prime Minister Modi and the Saudi Crown Prince at the forefront of the world stage. As the kingdom needs aluminum, steel , construction materials, India is hungry for cheap oil and in the future cheaper electricity.”
Several countries connect continents via power cables for power. As oil and gas prices rise, Europe faces an energy crisis. Russia was the bloc’s largest oil and gas supplier in 2021, supplying around 40% of total energy needs. But after the invasion of Ukraine and the imposition of sanctions, energy prices rose, leaving some countries uncertain about their supply this winter.
The UK and Norway exchange offshore wind and hydropower over an 800km submarine cable. Greece is embarking on one of the most ambitious energy projects in Europe by connecting its electricity grid to that of Egypt. An undersea cable will carry 3,000 MW of electricity – enough to power up to 450,000 homes – and link northern Egypt directly to Attica in Greece. The project is undertaken by the Copelouzos Group.
The GREGY interconnector, whose cost is set at 3.5 billion euros, has been qualified as a project of common interest (PCI) by the European Union, making it a key priority for the interconnection of infrastructures of the European Union’s energy system. It will transport clean electricity generated in Egypt and other African countries through submarine cables via wind and solar farms. The total length of the project is 1,373 km. Egypt has already completed interconnection projects with Libya, Sudan and Saudi Arabia and aspires to become a major energy hub for southeastern Europe. The project is expected to be completed in seven to eight years.
Similarly, four high voltage direct current (HVDC) power cables stretching 3,800 km from the south coast of Britain, under the sea, aim to connect to a desert area at Guelmim Oued Noun, in central Morocco.
Oil-rich Gulf countries, including Saudi Arabia, are also looking to diversify their energy needs to supply their power plants. The kingdom’s electricity is generated from natural gas (52%), oil (40%) and steam (8%). But a looming power shortage is forcing Saudi Arabia to increase its capacity from 55 GW to 120 GW by 2032.
Last year, Singapore and Australia signed a similar agreement for an undersea cable from a planned large solar farm project in the Northern Territory to supply the island nation with sustainable electricity by 2027. The project has won Australian Federal Government Major Project status this week, which will help facilitate the approval process for the $22 billion Australian-Asian Power Link using high voltage direct current (HVDC) technology.
“We already export and import electricity from Nepal, Bhutan, so the whole legal and regulatory framework is in place,” said a Dubai-based energy consultant familiar with the plans. “Very soon, connecting Greece to Bangladesh and then Singapore to Australia will no longer be a distant dream. The six to seven hour time difference is really conducive to arbitrage.”