A consortium including Global Infrastructure Partners (GIP), Brookfield Asset Management and Ontario Teachers’ Pension Plan Board is buying a 49% stake in Abu Dhabi National Oil Company’s (ADNOC) $20.7bn (€18.3bn) gas pipeline assets.
ADNOC, the state-owned oil company of the United Arab Emirates, said the investors, which also include Singapore’s sovereign wealth fund GIC, Korean securities firm NH Investment & Securities and the Italian-listed energy infrastructure operator Snam will invest $10.1bn in ADNOC Gas Pipeline Assets, in a deal that allows ADNOC to attract overseas capital.
ADNOC Gas Pipeline Assets, a newly formed subsidiary of ADNOC has lease rights to 38 pipelines covering a total of 982.3km, with ADNOC holding the 51% majority stake.
ADNOC said the transaction allows it 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”.
As part of the agreement, ADNOC will lease its ownership interest in the assets to ADNOC Gas Pipelines for 20 years.
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.
Sultan Al Jaber, UAE minister of state and ADNOC Group CEO, said: “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.
“It solidifies ADNOC’s position as an attractive partner and reinforces the UAE’s track record as the region’s go-to foreign direct investment destination, even during the current unprecedented circumstances.”
Adebayo Ogunlesi, chairman and managing partner of GIP said: “This transaction underscores GIP’s strategy of investing in high quality infrastructure assets and developing long term strategic partnerships with industry leaders.”
Bruce Flatt, CEO, Brookfield Asset Management, said: “This transaction aligns with our strategy of investing in high quality, essential assets generating stable and predictable cash flows in a sector we know well.
“ADNOC has established itself as one of the world’s leading natural gas producers, with an exemplary operational record.”
Ziad Hindo, CIO, Ontario Teachers’, said: “This strategic transaction is attractive to Ontario Teachers’ as it provides us with a stake in a high- quality infrastructure asset with stable long-term cash flows, which will help us deliver on our pension promise.”
Young-Chae Jeong, chairman and CEO of NH Investment & Securities, said: “Investing into ADNOC’s gas infrastructure and supporting Abu Dhabi’s energy initiatives reinforces our investment diversification strategy and demonstrates Korea’s growing presence in the global infrastructure space.
“I am confident this milestone transaction can become a stepping-stone to broaden Korean investments in the region.”
Snam CEO, Marco Alverà, said: “With this strategic transaction, we strengthen our international footprint by entering a country and a region that are key to our sector.
“Our aim is to promote further cooperation opportunities, particularly in the energy transition.”
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