Consortium to invest in select ADNOC gas pipeline assets
The Abu Dhabi National Oil Company (ADNOC) recently announced today that it has entered into an agreement with some of the world’s leading infrastructure investors and operators, sovereign wealth and pension funds.
A consortium of investors comprising Global Infrastructure Partners (GIP), Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities and Snam (the Consortium), will invest in select ADNOC gas pipeline assets valued at $20.7bn.
In one of the largest global energy infrastructure transactions, the Consortium will collectively acquire a 49% stake in ADNOC Gas Pipeline Assets (henceforth referred to as ADNOC Gas Pipelines), a newly formed subsidiary of ADNOC with lease rights to 38 pipelines covering a total of 982.3kms, with ADNOC holding the remainder 51% majority stake.
The innovative transaction structure allows ADNOC to tap new pools of global institutional investment capital, whilst at the same time maintaining full operating control over the assets included as part of the investment.
Under the terms of the agreement, ADNOC will lease its ownership interest in the assets to ADNOC Gas Pipelines for 20 years in return for a volume-based tariff subject to a floor and a cap. The transaction will result in upfront proceeds of over US$ 10bn to ADNOC and is subject to customary closing conditions and regulatory approvals.
The gas pipeline network connects ADNOC’s upstream assets to local UAE off-takers. Ownership of the pipelines, management of pipeline operations, and all responsibility for associated operational and capital expenditures will remain with ADNOC.
“This 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,” remarked Dr. Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO.
“This transaction underscores GIP’s strategy of investing in high quality infrastructure assets and developing long term strategic partnerships with industry leaders,” commented Adebayo Ogunlesi, Chairman and Managing Partner, GIP.
“We are pleased to invest in this strategic pipeline system, which serves as the critical link between UAE low-cost natural gas supply and robust in-country demand,” noted Bruce Flatt, CEO, Brookfield Asset Management.
This agreement is the largest transaction since ADNOC announced the expansion of its partnership and investment model in 2017, which aims to unlock value for ADNOC.
