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ADNOC inks $4bn pipeline investment with KKR, BlackRock

ADNOC inks $4bn pipeline investment with KKR, BlackRock
ADNOC uncovered its $4 billion midstream pipeline infrastructure partnership with KKR and BlackRock.

Abu Dhabi – Mubasher: The Abu Dhabi National Oil Company (ADNOC) on Sunday uncovered its $4 billion midstream pipeline infrastructure partnership with leading global institutional investors KKR and BlackRock.

Under the transaction, the newly formed entity, ADNOC Oil Pipelines, will lease ADNOC’s interest in 18 pipelines, transporting stabilised crude oil and condensate across ADNOC’s offshore and onshore upstream concessions, for a 23-year period.

ADNOC noted that the 18 pipelines being leased exceed 750 kilometres in length, with an aggregate capacity of approximately 13,000 million barrels per day (bpd).

Accordingly, ADNOC Oil Pipelines will receive a tariff payable by ADNOC for its share of volume of crudes and condensates, backed by minimum volume commitments.

“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,” ADNOC CEO Sultan Al Jaber commented.

Funds managed by BlackRock and KKR will form a consortium to collectively hold a 40% interest in the entity. Meanwhile, ADNOC will hold the remaining 60% majority stake, which will be held through ADNOC Infrastructure, a 100% ADNOC-owned subsidiary.

As part of the deal, sovereignty over the pipelines and management of pipeline operations remain with ADNOC.

"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 UAE,” KKR co-founder, co-chairman, and co-CEO Henry Kravis said.

The transaction is expected to be completed in the third quarter of 2019, subject to customary closing conditions and all regulatory approvals.