Jun 26 | 2020
(MENA) Record infrastructure transaction
Energy firm Abu Dhabi National Oil Company has announced a major US$20.7 billion investment programme to expand its gas pipeline assets.
The deal is classed as one of the largest global energy infrastructure transactions and will see investment from a consortium of leading infrastructure investors, sovereign wealth and pension funds.
“This milestone transaction demonstrates the trust and confidence placed in ADNOC by the global investment community and unlocks significant value from our pipeline portfolio, following last year’s ground-breaking oil pipeline infrastructure investment partnership. Today’s landmark investment signals continued strong interest in ADNOC’s low-risk, income-generating assets, and sets another benchmark for large-scale energy infrastructure investments in the UAE and the wider region,” Sultan Al Jaber, CEO of ADNOC Group, said.
20-year lease
Under the terms of the deal, the consortium of investors will acquire a 49 percent stake in ADNOC Gas Pipeline Assets with lease rights to 38 pipelines, covering a total of over 982 kilometers, for a 20 year period.
Partners include Global Infrastructure Partners, Brookfield Asset Management, Singaporean sovereign wealth fund GIC, Ontario Teachers, NH Investment & Securities and Snam.
“ADNOC’s gas network is a core piece of midstream infrastructure in the UAE and this transaction presents a unique opportunity to invest in an asset of this quality and importance, while also supporting ADNOC in their smart growth strategy,” Adebayo Ogunlesi, Chairman of GIP, commented.
Smart growth strategy
The record transaction is expected to support renewed breakbulk activity in the UAE and is in line with ADNOC’s expanded partnership and investment model, introduced in 2017. Under this strategy the group entered debt capital markets for the first time, issuing a $3 billion bond and has launched several strategic partnerships in drilling, refining, fertilizer and trading businesses
“These transactions and today’s landmark announcement are part of ADNOC’s ongoing delivery of its value creation strategy [and] unlocks significant capital that can be deployed into strategic initiatives to support ADNOC’s smart growth strategy,” ADNOC said in a statement.
ADNOC is owned and operated by the government of the UAE and controls some of the largest oil and gas reserves in the world. The group is regularly ranked as one of the largest oil companies by production.
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