ADNOC’s 2025 Geothermal Strategy: A Blueprint for Energy Transition & Investment

Industry Adoption: How ADNOC Is Proving the Commercial Case for Geothermal Cooling

Between 2021 and 2024, Abu Dhabi National Oil Company (ADNOC) initiated a deliberate and pragmatic pivot into geothermal energy, moving from concept to a commercially operational pilot. This period was characterized by strategic foundation-setting: allocating an initial $15 billion for low-carbon projects, forming key technology and execution partnerships with Baker Hughes and Tabreed, and drilling the first geothermal wells in Masdar City. The objective was clear: leverage decades of oil and gas subsurface expertise to tackle a major regional energy challenge—the immense power demand for air conditioning. The culmination of this phase was the December 2023 launch of the G2COOL plant, which began supplying 10% of Masdar City’s cooling needs. This was a critical de-risking step, proving the technical viability of direct-use geothermal for district cooling in the Gulf region.

The period from 2025 to today marks an inflection point, shifting from proving viability to validating a scalable business model. The G2COOL project is no longer just a pilot; it is now framed as a “landmark” and a “critical proof-of-concept” that successfully cuts cooling-related electricity consumption. The narrative has evolved from exploration to execution and optimization. This is evidenced by ADNOC’s deployment of advanced AI workflows with partners like SLB for subsurface analysis, repurposing sophisticated oil and gas technology to more efficiently map geothermal potential and reduce upfront exploration costs. This validation signals a new opportunity: the creation of a replicable, low-carbon utility service. The threat of high exploration risk, which loomed over the initial phase, has been significantly mitigated by the success of G2COOL, paving the way for confident expansion.

Table: ADNOC’s Strategic Geothermal Investments

Table: ADNOC’s Geothermal Partnership Ecosystem

Geography: ADNOC’s Homegrown Strategy Goes Global

Between 2021 and 2024, ADNOC’s geothermal activities were exclusively concentrated in the United Arab Emirates, specifically at the G2COOL project in Abu Dhabi’s Masdar City. This hyper-local focus was a deliberate strategic choice. By operating in its home territory, ADNOC could leverage its existing infrastructure, deep understanding of the local geology, and strong relationships to de-risk a first-of-its-kind project for the region. This approach allowed the company to pilot the technology in a controlled environment while addressing a significant local driver: the high energy cost of cooling in an arid climate.

From 2025 onward, the geographic outlook has expanded significantly. While the UAE remains the core operational theater, with ADNOC and Tabreed actively assessing new sites for expansion, the proven success of the G2COOL model has opened the door to international opportunities. The strategy is now viewed as a replicable blueprint for other nations in the Gulf region and arid climates worldwide. The most concrete signal of this global ambition is the mention of ADNOC’s $80 billion international energy investment firm, XRG, as a potential vehicle for acquiring or investing in geothermal assets and technologies globally. This represents a strategic shift from a domestic proof-of-concept to a potentially global clean energy business line.

Technology Maturity: ADNOC’s Journey from Pilot to Proven Model

In the 2021–2024 period, ADNOC’s focus was on moving direct-use geothermal technology from concept to a commercially operating pilot. The timeline shows a clear progression: technology-focused partnerships were established (Baker Hughes, 2022), exploratory wells were drilled and successfully tested (August 2023), and the G2COOL plant was commissioned (December 2023). The technology itself—using heat from underground aquifers to power absorption chillers for district cooling—was demonstrated at a meaningful scale, providing 10% of Masdar City’s cooling demand. This phase was about proving that the technology worked within the UAE’s specific geological context.

The period from 2025 to today has solidified the technology’s maturity, elevating it from a successful pilot to a validated, scalable model. The narrative now centers on the “physics and promise” of the technology and its commercial benefits, such as a projected 10% reduction in electricity demand. A key shift is the move towards optimizing and scaling the exploration process. The collaboration with SLB to use AI for subsurface mapping indicates that ADNOC is now focused on making the front-end of geothermal development faster and cheaper. The strategy has been validated as an intelligent application of technology, deliberately sidestepping the complexities of power generation from the region’s moderate-temperature resources to focus on the high-impact application of cooling.

Table: SWOT Analysis of ADNOC’s Geothermal Strategy

Forward-Looking Insights: What’s Next for ADNOC’s Geothermal Ambitions

The most recent data from 2025 sends clear signals about the trajectory of ADNOC’s geothermal strategy. The year ahead will likely be defined by expansion and optimization. Market actors should watch for three key developments. First, expect formal announcements on the scaling of geothermal cooling across the UAE. With the G2COOL model validated and a strong partnership with Tabreed in place, expanding to other urban developments is the logical next step. Second, pay attention to ADNOC’s new international investment arm, XRG. Its first move into the global geothermal market, whether through an asset acquisition or a technology investment, will be a major indicator of the company’s global ambitions.

Finally, while direct-use cooling is the pragmatic focus, ADNOC’s long-term interest in power generation should not be dismissed. The ongoing technology partnerships with Baker Hughes and SOCAR could yield breakthroughs or identify high-temperature resources previously overlooked. Any pilot project or feasibility study in this area would signal a new chapter in ADNOC’s energy transition. In summary, ADNOC’s geothermal journey is gaining significant traction, moving from a cautious first step to a confident stride towards becoming a key player in sustainable infrastructure.

Frequently Asked Questions

What is ADNOC’s primary goal with its geothermal strategy?
ADNOC’s primary goal is to leverage its subsurface expertise to provide a low-carbon solution for the immense power demand for air conditioning in the region. The strategy focuses on direct-use geothermal for district cooling, as successfully demonstrated by the G2COOL plant, rather than power generation, which is less suited to the region’s moderate-temperature geological resources.

How is ADNOC financing its move into geothermal energy?
According to the report, ADNOC is funding its geothermal and other low-carbon projects through significant financial commitments. This includes an initial $15 billion allocation for its Low-Carbon Solutions Fund, which supports the G2COOL project, and a separate $3 billion green financing facility secured with the Japan Bank for International Cooperation (JBIC) in July 2024 to support its energy transition initiatives.

What is the significance of the G2COOL project?
The G2COOL project is a ‘landmark’ initiative that serves as a critical proof-of-concept for ADNOC. It successfully proved the technical viability and commercial case for using geothermal energy for district cooling in the Gulf region. By supplying 10% of Masdar City’s cooling needs, it has de-risked the technology and created a scalable, replicable business model for future expansion.

Who are ADNOC’s main partners in its geothermal ventures?
ADNOC has built a partnership ecosystem to support its geothermal strategy. Key partners mentioned are Tabreed for operating the district cooling plant, SLB for using advanced AI for subsurface analysis, Baker Hughes for technology R&D, Masdar for project development in Masdar City, and SOCAR for exploring international opportunities in geothermal technology.

Does ADNOC have plans to expand its geothermal projects internationally?
Yes. While the initial phase was focused exclusively on the UAE, the strategy from 2025 onwards includes significant international ambition. The article states that the G2COOL model is seen as a replicable blueprint for other arid climates. ADNOC’s $80 billion international energy investment firm, XRG, is mentioned as a potential vehicle for acquiring or investing in geothermal assets and technologies globally.