Adnoc in $20.7b pipeline deal

Consortium will collectively acquire 49% stake in oil giant’s assets

Abu Dhabi National Oil Company has struck a $20.7 billion deal with six global investors, whereby the latter will invest $10.1 billion to acquire a 49 per cent stake in a newly set up subsidiary.

Adnoc Gas Pipeline Assets will see the Abu Dhabi energy giant hold 51 per cent, according to agency reports.

The group of six will have lease rights to 38 pipelines. The six are Global Infrastructure Partners, Brookfield Asset Management, Singapore wealth fund GIC, Canada’s Ontario Teachers’ Pension Plan Board, NH Investment & Securities and Snam.

The transaction structure allows Adnoc to tap “new pools of global institutional investment capital”, while maintaining full operating control over the assets included as part of the investment.

Under the terms of the agreement, Adnoc will lease its ownership interest in the assets to Adnoc Gas Pipelines for 20 years in return for a volumebased tariff subject to a floor and a cap.

The transaction will result in upfront proceeds of over $10 billion to Adnoc and is subject to customary closing conditions and regulatory approvals.

Under the terms, Adnoc will lease ownership interest in the assets to Adnoc Gas Pipelines for 20 years in return for a “volume-based tariff” subject to a floor and a cap.

The transaction will result in upfront proceeds of over $10 billion to Adnoc and subject to customary closing conditions and regulatory approvals.

The gas pipeline network connects Adnoc’s upstream assets to local UAE cutomers. Ownership of the pipelines, management of pipeline operations, and all responsibility for associated operational and capital expenditures will remain with Adnoc.

For the partners, this transaction represents a “unique opportunity to invest in quality energy infrastructure assets with a low-risk profile that generate stable cashflows”.

Sultan Al Jaber, UAE Minister of State and Adnoc CEO, said Adnoc will continue to work with strategic investors to attract foreign capital and focus on maximising value from its resources.

“Today’s landmark investment signals continued strong interest in Adnoc’s low-risk, income-generating assets,” he said. “And sets another benchmark for large-scale energy infrastructure investments.”