Abu Dhabi’s ADNOC sells pipeline firm stake to foreign investors

ABU DHABI, United Arab Emirates – Abu Dhabi National Oil Company (ADNOC) said on Tuesday, June 23, it has agreed to sell a 49% stake in its gas pipeline subsidiary to leading global investors for over $10 billion.

Under the deal, the consortium of investors acquires a 49% stake in Gas Pipeline Assets, a newly formed subsidiary of ADNOC with lease rights to 38 pipelines covering a total of 982.3 kilometers (614 miles).

State-owned ADNOC, which manages all the hydrocarbon resources of the emirate of Abu Dhabi, will continue to hold a 51% majority stake in the gas subsidiary, it said in a statement.

The deal puts the value of the gas pipeline assets at $20.7 billion, the statement said.

The consortium includes Singapore’s sovereign wealth fund GIC and Brookfield Asset Management, a long-term asset manager, among others.

ADNOC said the deal provides over $10 billion in cash proceeds to the state-owned firm amid a sharp plunge in oil income, which makes up the majority of Abu Dhabi’s public revenues. 

Last year, it raised $4 billion by selling 40% in ADNOC Oil Pipeline, a subsidiary that carries all Abu Dhabi crude, to United States-based investors BlackRock and KKR.

Since 2017, ADNOC has granted concession rights in existing and new oilfields to leading international companies.

ADNOC chief executive officer Sultan al-Jaber said the latest deal is the region’s largest infrastructure investment and that it “signals continued strong interest in ADNOC’s low-risk, income-generating assets.”

The United Arab Emirates, a leading Organization of the Petroleum Exporting Countries crude producer, holds the world’s 6th biggest gas reserves, and in recent months it has announced fresh discoveries of massive quantities of gas and crude oil.

ADNOC plans to boost gas production so that the UAE becomes a net exporter, and also to raise crude output capacity to 4 million barrels per day (bpd) in 2020 and to 5 million bpd a decade later. – Rappler.com