The Abu Dhabi National Oil Company (ADNOC) concluded a $4 billion agreement for pipeline infrastructure investment, the company announced Sunday.
The state-owned oil company of the United Arab Emirates (U.A.E.) said in a statement that it has entered into a midstream pipeline infrastructure partnership with two of the world's biggest investors; KKR and BlackRock.
As part of the deal, a newly-formed entity called ADNOC Oil Pipelines will lease ADNOC’s interest in 18 pipelines, transporting crude oil and condensate across the company's onshore and offshore upstream concessions for a 23-year period, according to the statement.
In return, the entity will receive a tariff payable by ADNOC for its share of crude and condensate that flows through the pipelines, it said.
Funds managed by KKR and BlackRock will form a consortium to collectively hold a 40 percent interest in the new entity, while ADNOC will hold the remaining 60 percent majority stake, the statement said, adding that the sovereignty and management of pipeline operations would remain with ADNOC.
"We are creating a range of attractive opportunities for global and regional institutional investors to partner and invest alongside ADNOC to enhance value from our sizeable infrastructure base," Sultan Al Jaber, U.A.E. minister of state and ADNOC Group CEO, said in the statement.
"... This transaction marks a milestone for ADNOC and Abu Dhabi as it paves the way for further significant foreign direct investment into the U.A.E.," he added.
The agreement is expected to close in the third quarter of 2019 after all regulatory approvals.
By Ovunc Kutlu