The Abu Dhabi National Oil Company (ADNOC) has entered a multi-billion-dollar midstream pipeline infrastructure partnership with institutional investors KKR and BlackRock
The transaction will result in upfront proceeds of approximately US$4bn to ADNOC and is expected to close in Q3 2019, according to a statement from ADNOC.
As part of the transaction, a newly formed entity called ADNOC Oil Pipelines will lease ADNOC’s interest in 18 pipelines for a 23-year period.
The entity will, in turn, receive a tariff payable by the company, for its share of volume of crude and condensate that flows through the pipelines, backed by minimum volume commitments.
Funds managed by BlackRock and KKR will form a consortium to collectively hold a 40 per cent interest in the entity, while ADNOC will hold the remaining 60 per cent, it added
Dr Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, said, “The level and sophistication of the investors that we are attracting as financial partners to invest, alongside Adnoc, in these select pipeline assets is a clear reflection of the UAE’s stable, attractive and reliable investment environment. This transaction marks a milestone for ADNOC and Abu Dhabi as it paves the way for further significant foreign direct investment into the UAE.”
Henry Kravis, co-founder, co-chairman and co-CEO of KKR, commented, “We have created an innovative core midstream infrastructure platform alongside ADNOC and BlackRock that can be a catalyst for further foreign investment and broader economic transformation in the United Arab Emirates. Having long had a presence in the region, we appreciate the high quality of ADNOC as a partner and Abu Dhabi’s investor-friendly environment to enable our first direct investment in the region.”
Laurence D. Fink, chairman and CEO of BlackRock, stated, “Public-private partnerships are essential for investment to drive continued economic growth in the region, and we believe that this agreement among ADNOC, BlackRock and KKR will be followed by many more such partnerships to invest in the future growth of the region.”
