Adnoc inks $4b infrastructure deal with BlackRock, KKR
dubai — Abu Dhabi National Oil Company (Adnoc) on Sunday announced a $4 billion midstream pipeline infrastructure deal with US investment firms BlackRock and KKR.
The agreement gives the two investors a joint stake of 40 per cent in Adnoc Oil Pipeline, a newly-established firm that owns all of the 18 pipelines that carry Abu Dhabi crude oil and condensates, a statement said. Adnoc will keep the remaining 60 per cent and also have sovereignty over the pipelines and management of operations, the state-owned company said.
The new entity will lease the oil company’s interest in 18 pipelines, transporting crude oil and condensates across Adnoc’s upstream concessions for a 23-year period. The 18 pipelines have a total length of over 750 km and capacity of 13 million barrels per day.
Dr Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO, said the level and sophistication of the investors that the company is attracting as financial partners to invest in these select pipeline assets is a clear reflection of the UAE’s stable, attractive and reliable investment environment.
“It also demonstrates the global investment community’s validation of Adnoc’s progressive and smart approach to unlocking value from its portfolio of assets while retaining control over their ownership and operation.”
Al Jaber said the transaction is another example of the innovative steps Adnoc is taking to constantly optimise assets and capital.
“We are creating a range of attractive opportunities for global and regional institutional investors to partner and invest alongside Adnoc to enhance value from our sizeable infrastructure base, drawing on our expertise in structuring and packaging value-enhancing partnership programs that preserve Abu Dhabi’s ownership and control of its assets. Most importantly, this transaction marks a milestone for Adnoc and Abu Dhabi as it paves the way for further significant foreign direct investment into the UAE,” Al Jaber said.
Henry Kravis, co-founder, cochairman and co-CEO of KKR, said the innovative core midstream infrastructure platform can be a catalyst for further foreign investment and broader economic transformation in the UAE.
“Having long had a presence in the region, we appreciate the high quality of Adnoc as a partner and Abu Dhabi’s investor-friendly environment to enable our first direct investment in the region. With this transaction as a precedent, we believe there is substantial potential to do even more,” he added.
“For many years, BlackRock has had strong relationships in the UAE and across the region, so we are especially pleased to be able to play a role in this landmark transaction,” said Laurence D. Fink, chairman and CEO of BlackRock.
The deal is the latest in a string of strategic partnership agreements entered into by the energy giant since 2017. In January, it won a combined $5.8 billion investment from Italy’s Eni and Austria’s OMV for a stake in its refining business to establish a new trading operation owned by the three partners.
The conglomerate has also signed a series of agreements with major international oil firms to attract funding and expertise in a bid to boost production of crude oil and natural gas as well as refining capacity. In 2018, Adnoc granted concession rights in existing and new oilfields and earmarked some $132 billion over the next five years to boost crude output capacity.