Abu Dhabi Pension Fund, ADQ invest $2.1bln in ADNOC energy infrastructure deal

With the addition of domestic investors, ADNOC can also tap new pools of long-term equity capital

  
A general view of ADNOC headquarters in Abu Dhabi, United Arab Emirates May 29, 2019.

A general view of ADNOC headquarters in Abu Dhabi, United Arab Emirates May 29, 2019.

REUTERS/Christopher Pike

Abu Dhabi Pension Fund (ADPF) and ADQ, one of the region’s largest holding companies, will invest $2.1 billion into select Abu Dhabi National Oil Company (ADNOC) gas pipeline infrastructure assets.

Under the terms of the agreement, ADNOC will divest 20 percent in ADNOC Gas Pipelines HoldCo, a wholly owned ADNOC entity that holds 100 percent of ADNOC’s interest in ADNOC Gas Pipeline Assets LLC (ADNOC Gas Pipelines), to ADPF and ADQ, ADNOC said in a statement.

ADNOC Gas Pipelines is a subsidiary of ADNOC with lease rights to 38 gas pipelines covering a total of 982 kilometers. In July 2020, a consortium of global investors, comprising Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities and Snam (the Consortium), invested $10.1 billion for a collective 49 percent stake in the same select ADNOC gas pipeline infrastructure assets.

Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “By partnering again with Abu Dhabi Pension Fund, the custodian and investor of the UAE’s citizens savings and long-term prosperity, ADNOC is playing a pivotal role in ensuring the financial wellbeing of the UAE community and its people. This follow-on investment will generate stable, long-term value and returns to both Abu Dhabi Pension Fund and ADQ’s stakeholders."

With the addition of these domestic investors, ADNOC can also tap new pools of long-term equity capital, while still maintaining operating and ownership control over the assets included as part of the investment agreement, the statement said.

"Their engagement highlights and underlines the attractiveness and long-term value creation potential of our unique energy assets to the global investment community, further reinforcing ADNOC’s role as a primary driver in attracting tier one global institutional capital into Abu Dhabi and the UAE,” Al Jaber added.

ADNOC has sought to accommodate a combination of both international and domestic institutional investors in many of its investment opportunities, a case in point would be its pioneering oil pipeline investment agreement closed in September 2019.

(Writing by Seban Scaria; editing by Daniel Luiz)

(seban.scaria@refinitiv.com)

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© ZAWYA 2020

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