Abu Dhabi National Oil Company (Adnoc) has signed a $4bn midstream pipeline infrastructure partnership with US-based institutional investors KKR and BlackRock.
Under the agreement, a newly formed entity known as Adnoc Oil Pipelines will lease ADNOC’s interest in 18 pipelines for a 23-year period.
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Spanning a total length exceeding 750km and having an aggregate capacity of around 13,000 million barrels a day, the pipelines transport stabilised crude oil and condensate across Adnoc’s offshore and onshore upstream concessions.
The products are shipped to Abu Dhabi’s key takeaway outlets and terminals or on to global energy markets.
Adnoc will be the majority owner of Adnoc Oil Pipelines, holding a 60% interest. The BlackRock and KKR consortium will own the remaining 40% stake.
The oil company will have sovereignty over the pipelines and management of the operations.
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By GlobalDataThe investor firms are required to make an upfront payment of $4bn to Adnoc.
Adnoc Group CEO Dr Sultan Al Jaber said: “This transaction is another example of the innovative steps we are taking to constantly optimise our assets and capital and deliver sustained value to both ADNOC and the UAE.
“Most importantly, this transaction marks a milestone for ADNOC and Abu Dhabi as it paves the way for further significant foreign direct investment into the UAE.”
KKR is investing in the pipelines through its third Global Infrastructure Investors fund, while BlackRock’s investment is through its Global Energy & Power Infrastructure Fund (GEPIF) series.
Subject to the satisfaction of closing conditions, including the receipt of regulatory approvals, the transaction is expected to be completed in the third quarter of this year.
Last month, Adnoc offered a stake in its refining business to Eni and OMV to raise $5.8bn.
Adnoc produces three million barrels of oil and 10.5 billion cubic feet of natural gas a day.
