Mar 04 | 2019
UAE oil and gas firm Abu Dhabi National Oil Co. has signed a “landmark” pipeline infrastructure investment agreement with institutional investors KKR and BlackRock.
The deal covers development of multibillion-dollar midstream pipeline infrastructure in the UAE, and is expected to spur an uptick in breakbulk activity across the country as construction ramps up.
“We have created an innovative core midstream infrastructure platform alongside ADNOC and BlackRock that can be a catalyst for further foreign investment … we believe there is substantial potential to do even more,” said Henry Kravis, Co-CEO of KKR.
Expanding Partnership Model
The agreement marks the first time that leading, global institutional investors have deployed capital into the country’s midstream infrastructure assets, and has been seen as validation of ADNOC’s strategy to unlocking value from its portfolio of assets while retaining control over their ownership and operation.
“The level and sophistication of the investors that we are attracting as financial partners to invest, alongside ADNOC, in these select pipeline assets is a clear reflection of the UAE’s stable, attractive and reliable investment environment,” said Sultan Al Jaber, UAE Minister of State.
To date operations have been limited by strict government controls, impeding breakbulk activity from foreign operators, but the latest agreement is not expected to lay the groundwork for ADNOC to significantly expanding its strategic partnership model.
ADNOC Oil Pipelines
Newly formed joint venture entity ADNOC Oil Pipelines will be 40 percent owned by funds managed by BlackRock and KKR, while ADNOC will hold the remaining 60 percent majority stake.
The deal covers leasing of ADNOC’s interest in 18 pipelines, as well as transport of stabilized crude oil and condensate across ADNOC’s offshore and onshore upstream concessions, for a 23-year period.
Photo: ADNOC, KKR and BlackRockat signing ceremony. Credit: ADNOC
