ADNOC enters $20.7 billion energy infrastructure deal

A consortium of investors has agreed to a $20.7-billion energy infrastructure deal with Abu Dhabi National Oil Co. (ADNOC).

Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities, and Snam agreed to the deal that will see the consortium acquire a 49% stake in ADNOC Gas Pipeline Assets LLC, a newly formed ADNOC subsidiary with lease rights to 38 pipelines covering 982.3 km. ADNOC will hold the 51% majority stake.

Under the terms 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.

The gas pipeline network connects ADNOC’s upstream assets to local UAE off-takers. Ownership of the pipelines, management of pipeline operations, and all responsibility for associated operational and capital expenditures will remain with ADNOC.

The transaction—carried out remotely over the past months—is the largest transaction since ADNOC announced the expansion of its partnership and investment model in 2017. Since then, ADNOC has entered the debt capital markets for the first time, issuing a $3 billion bond backed by the Abu Dhabi Crude Oil Pipeline; partially floated ADNOC Distribution, the first-ever IPO of an ADNOC Group company; and entered into several strategic partnerships in its drilling, refining, fertilizer and trading businesses, amongst others, the operator said in a release June 23.