ADNOC’s pipeline assets to get investments from ADFP, ADQ

As the Abu Dhabi National Oil Company (ADNOC) looks to open up opportunities for local investors, the Abu Dhabi Pension Fund (ADFP) and ADQ will invest $2.1 billion in the energy company’s gas-pipeline infrastructure.

The two companies will take a 20% stake in a wholly owned subsidiary Adnoc Gas Pipelines HoldCo that retains 100% of ADNOC’s stake in the gas pipelines.

An agreement worth $20.7 billion to invest in Abu Dhabi’s natural gas pipeline system was signed in July this year by a group of the world’s leading infrastructure and sovereign wealth funds.

In ADNOC’s promising midstream assets, Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, South Korea’s NH Investment & Securities and Italy’s Snam took stakes in this transaction.

The deal, this year’s largest single global energy infrastructure contract and the largest in the Middle East, would allocate $10.1 billion of foreign investment to the UAE.

Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and chief executive of the ADNOC Group, said that the addition of ADPF and ADQ to the transaction sets a ‘benchmark’ for global and local capital to invest long-term equity into key energy assets in the Emirate.

“This follow-on investment will generate stable, long-term value and returns to both Abu Dhabi Pension Fund and ADQ’s stakeholders. 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.”

This is the second time ADFP is taking a stake in in ADNOC’s midstream assets. Last year, the fund invested $300 million in ADNOC’s Oil pipeline system, joining other foreign private equity firms like BlackRock and KKR.

BlackRock, the world’s largest asset manager, and KKR, based in the US, paid up to $4 billion in advance last year to lease some of Abu Dhabi’s pipeline assets.

Earlier this year, ADNOC also joined forces with ADQ, the industrial holding company of the Emirate, to accelerate the growth of the production of chemicals at Ruwais. The companies will assess and invest in select “anchor chemical projects” and draw additional investors to the industrial hub in the Al Dhafra region of the Emirate.

In December 2017, ADNOC also listed 10 percent of its distribution company on the Abu Dhabi Securities Exchange, enabling local investors to take part in the share offerings.

Abu Dhabi Pension Fund

ADFP was founded in 2000 to manage contributions, pensions and end-of-service benefits for UAE nationals working in or retired from the government and private sectors in the Emirate of Abu Dhabi and their beneficiaries.

ADQ

ADQ is a state-owned holding company with a broad portfolio of major enterprises, spanning across key sectors of Abu Dhabi’s diversified economy.