The Abu Dhabi National Oil Company (ADNOC) entered into a record $20.7 billion agreement with a consortium of six global investors to invest in the company's gas pipeline infrastructure through ADNOC Gas Pipeline, a newly formed subsidiary of ADNOC, the company announced Tuesday.
The consortium includes Global Infrastructure Partners (GIP), Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board (Ontario Teachers’), NH Investment and Securities, and Snam.
The consortium will hold a 49% stake in ADNOC Gas Pipeline, with lease rights to 38 pipelines covering a total of 982.3 kilometers for 20 years.
It will invest in assets in the pipeline with ADNOC holding a 51% majority stake with full operating control over the assets.
As part 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 $10 billion to ADNOC and is subject to customary closing conditions and regulatory approvals.
-Region’s largest energy infrastructure investment
Not only is it the single-largest energy infrastructure transaction in the region but also the biggest in the world in 2020 with the deal set to bring $10.1 billion to ADNOC.
“We are pleased to once again partner with some of the world’s leading global infrastructure and institutional investors in what marks the region’s largest energy infrastructure investment,” said Sultan Al Jaber, ADNOC Group CEO.
Bruce Flatt, CEO of Brookfield Asset Management said the investment in the strategic pipeline system would serve as the critical link between the United Arab Emirates' (UAE) low-cost natural gas supply and robust in-country demand.
By Sibel Morrow