The UK/UAE Hydrogen Power Abu Dhabi joint venture will not be able to launch a construction deal for the world’s biggest hydrogen power plant until the second quarter of the year as it has been unable to complete offtake and financing agreements, according to sources close to the scheme.

In January, senior executives working on the scheme, a 60:40 joint venture of Abu Dhabi Future Energy Company (Masdar) and the UK’s BP, said they wanted to tender the engineering, procurement and construction deal by the end of March (MEED 19:1:10).

However, sources close to the scheme say negotiations with Abu Dhabi National Oil Company (Adnoc), Abu Dhabi Water & Electricity Authority (Adwea) and potential financiers are yet to be completed and a formal invitation to bid on the scheme will probably not be sent out before the second quarter of 2010.

The power plant will break down natural gas supplied by Adnoc into hydrogen and carbon dioxide.

The hydrogen will be used to generate 400MW of power. Masdar wants to sell this to Adwea. The company also plans to sell the carbon dioxide back to Adnoc for injection into its oilfields, as part of a wider carbon capture and storage scheme.

An agreement has been reached over the volume and cost of the gas to be supplied by Adnoc, but deals over how much carbon dioxide Adnoc will take from Masdar and how much it will pay for it have not been completed, according to executives working on the scheme.

Similarly, an agreement is yet to be reached over the terms of the electricity deal with Adwea. One executive with ties to the project says the power company is loathed to pay more for the energy just because it comes from an environmentally sustainable source.

The partners cannot enter into talks over financing for the $2.2bn project until it has firm agreements in place with Adnoc and Adwea, according to a project adviser.