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

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

ADNOC will divest 20 per cent in ADNOC Gas Pipelines HoldCo LLC

The Abu Dhabi Pension Fund (ADPF) and holding firm ADQ, will invest $2.1bn into select gas pipeline infrastructure assets of the Abu Dhabi National Oil Company (ADNOC).

In return, ADNOC will divest 20 per cent in ADNOC Gas Pipelines HoldCo LLC to ADPF and ADQ.

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 of 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 $10.1bn for a collective 49 per cent stake in the same select ADNOC gas pipeline infrastructure assets.

Read: BlackRock, Snam bid for stake in $15bn ADNOC unit

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.

Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “We are delighted to once again partner with both Abu Dhabi Pension Fund and ADQ. Joining our global investor consortium partners in this landmark energy infrastructure investment, the addition of these high-caliber UAE investors sets a new benchmark for leading global and domestic institutional investors to deploy long-term equity capital into key ADNOC energy infrastructure assets.

“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.”

For ADPF, this marks the second investment partnership into ADNOC’s infrastructure assets, following its $300m investment into select ADNOC oil pipelines, announced in April 2019.

In July 2020, ADNOC and ADQ signed a joint venture agreement to create a new investment platform to fund and oversee the development of industrial projects within the planned Ruwais Derivatives Park.

“This agreement comes after the successful investment cooperation between the Fund and ADNOC in the oil pipeline infrastructure space, which concluded last year and marked a major shift in the quality of the Fund’s investments,” said Khalaf Abdullah Rahma Al Hammadi, director general of Abu Dhabi Pension Fund.

“The Fund is looking to strengthen its strategic partnership with ADNOC to further diversify its investment portfolio and achieve long-term returns for its stakeholders.”

“ADQ is investing in a group of midstream infrastructure assets, which are at the heart of Abu Dhabi’s goal of achieving gas self-sufficiency and becoming a gas net exporter,” said Mohamed Hassan Alsuwaidi, CEO of ADQ.

Since announcing the expansion of its partnership and investment model, ADNOC has entered the debt capital markets for the first time, issuing a $3bn bond backed by the Abu Dhabi Crude Oil Pipeline; partially floated ADNOC Distribution, the first-ever IPO of an ADNOC Group company; and entered into several strategic investment partnerships in its drilling, refining, fertilizer and trading businesses, amongst others.

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