UAE-based Abu Dhabi National Oil Company (ADNOC) has reached an agreement to sell a stake of 49% in ADNOC Gas Pipeline Assets (ADNOC Gas Pipelines) to a group of six global investors for $10.1bn.
The investor group is made up of Global Infrastructure Partners (GIP), Brookfield Asset Management, Singaporean sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities, and Snam.
ADNOC Gas Pipelines is a newly formed subsidiary which will have lease rights to 38 pipelines spanning a total of 982.3km. ADNOC will hold a stake of 51% in the natural gas pipeline business, which is valued at $20.7bn.
The gas pipeline network links the upstream assets of the state-owned energy company to domestic UAE off-takers.
As per the agreement terms, ADNOC will lease its ownership stakes in the assets to ADNOC Gas Pipelines for 20 years in exchange for a volume-based tariff subject to a floor and a cap.
According to ADNOC, the structure of the transaction enables it to unlock new pools of global institutional investment capital, while at the same time retaining full operating control over the pipeline assets included as part of the investment.
The UAE-based firm will retail the ownership of the gas pipelines, management of their operations, and all the responsibility for related operational and capital expenditures.
For the six investors, the ADNOC Gas Pipelines deal is said to offer scope in investing in quality energy infrastructure assets that have a low-risk profile, while generating stable cash flows.
GIP chairman and managing partner Adebayo Ogunlesi said: “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.”
Last year, ADNOC created a similar type of partnership for its oil pipelines business, which secured investments from BlackRock, KKR, Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF), and GIC.
ADNOC CEO comments on the investment secured for ADNOC Gas Pipelines
ADNOC Group CEO Sultan Al Jaber said: “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 groundbreaking oil pipeline infrastructure investment partnership.”
The closing of the deal is subject to customary closing conditions and receipt of regulatory approvals.
