Consortium of six international companies has entered into a $20.7 billion agreement with Abu Dhabi National Oil Company (ADNOC), the state-owned oil company said Tuesday.
Under the terms of the deal, Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund, the Ontario Teachers’ Pension Plan Board, Snam, and NH Investment and Securities will acquire a 49-percent interest in ADNOC Gas Pipeline Assets, a new subsidiary of the UAE’s national oil and gas company.
The acquisition will give the buyers lease rights to 38 pipelines, but ADNOC will retain ownership of the assets and responsibility for capital expenditure plans. The lease rights will be in effect for 20 years.
“The innovative transaction structure allows ADNOC 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,” the Emirati company said in its press release.
Reports about ADNOC’s plans to sell a minority stake in its gas pipeline infrastructure emerged last year, with unnamed sources saying the company was eyeing proceeds of up to $5 billion.
The sale process, which could be structured as a long-term lease rather than a direct stake sale, is expected to attract private equity firms and infrastructure funds, the sources told Bloomberg.
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The record deal is part of ADNOC’s ongoing efforts to expand its midstream and downstream operations by inviting foreign capital into its business. The state oil company has also set its sights on downstream deals outside the Middle East region, especially in Asia, to lock in future demand for its oil.
Earlier in 2019, the Emirati state major closed a similar minority stake deal worth $4.9 billion for its oil pipeline network. The participants in that deal included Singapore’s sovereign wealth fund again, BlackRock, KKR, and the Abu Dhabi Retirement Pensions and Benefits Fund.
“To me, the journey to the next normal may not be a straight line,” Al-Jaber said. “But I believe we are on the right track and on the right path for recovery.”