The UAE’s Abu Dhabi National Oil Company (ADNOC) has agreed to sell a 20% stake in ADNOC Gas Pipelines HoldCo to domestic investors Abu Dhabi Pension Fund (ADPF) and ADQ for $2.1bn.
Through the deal, ADPF and ADQ will be joining six global investors and ADNOC as co-owners of ADNOC Gas Pipeline Assets, a recently created natural gas pipeline business in the UAE.
ADNOC Gas Pipelines HoldCo is a fully-owned ADNOC entity that holds 100% of the latter’s interest in ADNOC Gas Pipeline Assets.
ADNOC Group CEO and UAE Minister of Industry and Advanced Technology Sultan Al Jaber said: “By partnering again with Abu Dhabi Pension Fund, the custodian and investor of the UAE’s citizens savings and long-term prosperity, ADNOC is playing a pivotal role in ensuring the financial wellbeing of the UAE community and its people. This follow-on investment will generate stable, long-term value and returns to both Abu Dhabi Pension Fund and ADQ’s stakeholders.
“Their engagement highlights and underlines the attractiveness and long-term value creation potential of our unique energy assets to the global investment community, further reinforcing ADNOC’s role as a primary driver in attracting tier one global institutional capital into Abu Dhabi and the UAE.”
Details of the gas pipelines partnership
Currently, ADNOC holds a 51% stake in ADNOC Gas Pipeline Assets, which has lease rights to 38 gas pipelines spanning a total of 982.3km.
The other 49% stake in the natural gas pipelines entity is held by Global Infrastructure Partners (GIP), Brookfield Asset Management, Ontario Teachers’ Pension Plan Board, Singaporean sovereign wealth fund GIC, NH Investment & Securities, and Snam.
In June 2020, ADNOC secured a $10.1bn investment from the six investors for the stake in the gas pipelines business. The deal, which valued the business at $20.7bn, was closed in the following month.
ADNOC said that by bringing in ADPF and ADQ in the gas pipeline subsidiary, it gets to leverage new pools of long-term equity capital. At the same time, ADNOC can maintain its operating and ownership control over the assets that are part of the investment deal.
ADQ CEO Mohamed Hassan Alsuwaidi said: “ADQ is investing in a group of midstream infrastructure assets, which are at the heart of Abu Dhabi’s goal of achieving gas self-sufficiency and becoming a gas net exporter.
“Our strategic investment in ADNOC’s gas infrastructure provides us with the opportunity for stable, predictable cash flows. Aligned with our mandate to create value for Abu Dhabi, we are further strengthening our relationship with ADNOC and its world-class infrastructure in the Emirate.”
Last year, ADNOC closed an oil pipeline investment deal with multiple international and domestic investors that included KKR, BlackRock, Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF), and GIC.
The UAE national oil company created a partnership called ADNOC Oil Pipelines – Sole Proprietorship (ADNOC Oil Pipelines) for bundling its 18 oil pipelines.
ADRPBF, which is a part of ADPF, invested $300m in the oil pipeline partnership as per a deal signed in April 2019.
