Media ININ Economy We Trust
Abu Dhabi 04-09-2019
Abu Dhabi National Oil Company (ADNOC) today announced that it has officially completed a strategic partnership agreement to invest in the field of oil pipelines distribution and distribution with the Singapore-owned sovereign wealth fund, under which the fund will invest $ 600 million in specific assets in the infrastructure of oil pipelines. Owned by ADNOC.
This follows the formal completion of the initial investment agreement with Black Rock and KKR on 27 June and the subsequent agreement with the Abu Dhabi Pension and Pension Fund on August 1. With this agreement, the total value of investments by Black Rock, KKR, Abu Dhabi Retirement Pensions and Benefits Fund and Singapore Sovereign Wealth Fund in specific assets in ADNOC’s oil pipeline and distribution infrastructure will increase to $ 4.9 billion.
This innovative leasing investment structure marks the first time that leading international and local institutional investors have invested long-term capital into ADNOC’s key infrastructure assets. Under the agreement, Black Rock and KKR will jointly acquire a 40 per cent stake in the newly established ADNOC Oil Pipeline LLC, while the Abu Dhabi Retirement Pensions and Benefits Fund will receive a stake. Singapore’s sovereign wealth fund receives 6%, while ADNOC’s “Main” holds the remaining 51%. ADNOC reserves the right to control and manage pipeline operations.
Ahmed Jassim Al Zaabi, Head of ADNOC’s Finance and Investment Department, said: “This pioneering strategic agreement is a clear testimony to the confidence of the global investment community in the UAE and ADNOC as attractive investment destinations. ADNOC’s infrastructure and our ability to structure and deliver investment opportunities that create value for our partners and investors. ”
Over the past two years, ADNOC has expanded its strategic partnership and joint investment model and created new investment opportunities in various areas and aspects of its business in the oil and gas sector, while promoting proactive management of the asset and capital portfolio.
Under the strategic agreement, ADNOC Pipelines will lease ADNOC’s stake in 18 pipelines that transport crude oil and condensate from ADNOC’s onshore and offshore concessions for 23 years.
ADNOC Pipeline LLC receives a tariff that ADNOC pays for its share of the amount of crude oil and condensate pumped through the pipeline, with a minimum commitment.
ADNOC Pipelines has pipelines with a total length of over 750 kilometers and a total capacity of about 13 million barrels per day. These assets represent a major transport and distribution infrastructure for the energy system in Abu Dhabi, allowing most of the crude oil production from Abu Dhabi’s onshore and offshore assets to be transferred to the emirate’s main outlets and terminals to be converted into other high-value products or exported to the global energy markets.
The pipeline is based on long-term commitments to pump a minimum amount of oil and condensate, supported by stable crude oil production from ADNOC onshore and offshore ADNOC, which have partnerships with international oil companies and the average remaining term of ADNOC onshore and offshore concessions is over 35 years.
The agreement continues ADNOC’s smart growth strategy and follows a number of recent value creation initiatives, including the start of ADNOC’s dealings with capital markets, the issuance of ADCOP’s bonds and the IPO of ADNOC Distribution. And ADNOC Drilling & Bakerheuse, ADNOC Refining, ENI, OMV, ADNOC Fertilizer and OCI.
Fitch has also granted ADNOC an independent credit rating of ‘AA +’ and an ‘AA’ rating for the ability to meet its long-term obligations, with a stable outlook. These ratings are currently the highest credit ratings given by Fitch to an oil and gas company in the world.
