UAE's ADNOC Pipeline Investment Deal Reaches Nearly $5 Billion

(P&GJ) - Singapore’s sovereign wealth fund (GIC) is investing $600 million in Abu Dhabi National Oil Company’s (ADNOC) crude pipeline infrastructure bringing the total combined deal to $4.9 billion.

The investment follows a deal made earlier this year which saw BlackRock and KKR invest a combined $4 billion into the newly formed company, ADNOC Oil Pipelines. The Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF) has invested $300 million.

The United Arab Emirates (UAE) accounts for 4% of the world’s crude production, much of it from fields owned and operated by ADNOC.

In exchange for the nearly $5 billion investments, ADNOC is leasing 750 kilometers (465 miles) across 18 of its pipelines over a 23-year period. The combined portion of pipelines being leased move more than 13 MMbpd of crude.

ADNOC Oil Pipelines will retain ownership and management of the pipelines which transport crude from both onshore and offshore fields to its own export and refining facilities and will receive a tariff from ADNOC for how much crude and condensate it transports. As part of the framework, minimum volume commitments have been put in place.

ADNOC has been actively expanding its partnership and co-investment model over the past two years while still managing its assets and capital. The company is not only opening up for co-investment in the UAE, it is also looking to form partnerships to invest with other major players elsewhere in the world. It has recently struck deals with Asian crude buyers in China, Japan and Indonesia, among others.

“With nearly $5bn of total investment, the overall agreement is testimony to the global investment community’s positive view on the attractiveness of both the UAE’s long-term potential, as well as the quality of ADNOC’s substantial infrastructure asset base,” said Ahmed Jasim Al Zaabi, group director of finance and investment at ADNOC.

GIC will gain 6% ownership of the company with BlackRock and KKR owning 40%, the Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF) 3%, and ADNOC the remaining 51%.

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