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The Abu Dhabi National Oil Company (ADNOC) has started a process to sell a minority stake in its natural gas pipeline infrastructure, with a potential deal expected to raise as much as US$5 billion, people in the know told Bloomberg on Thursday.
The process of the sale, which could be structured as a long-term lease rather than a direct stake sale, is expected to attract private equity firms and infrastructure funds, according to Bloomberg’s sources.
A deal could put a value of US$15 billion to the entire gas pipeline infrastructure of ADNOC, including debt, the sources said.
Earlier this year, ADNOC completed a pipeline infrastructure deal for its oil pipeline infrastructure. Under the leasing deal, BlackRock, KKR, the Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF), and Singapore’s sovereign wealth fund GIC invested a combined US$4.9 billion in ADNOC’s oil pipeline infrastructure. BlackRock and KKR together hold 40 percent in the newly formed entity ADNOC Oil Pipelines LLC, while ADRPBF owns 3 percent, GIC has 6 percent, and ADNOC keeps the remaining 51 percent. ADNOC also retains sovereignty over the pipelines and management of pipeline operations.
ADNOC—which pumps the oil in one of OPEC’s largest producers, the United Arab Emirates (UAE)—has started in recent years to expand its midstream and downstream businesses by forging partnerships with foreign firms that bring in capital to the UAE.
ADNOC, like Saudi Arabia’s state oil giant Aramco, also aims to strike downstream deals outside the Middle East region, especially in Asia, to lock in future demand for its oil. ADNOC, Saudi Aramco, and Indian state-owned companies plan a huge refinery on India’s west coast, whose price tag is expected to exceed the initial estimate of US$44 billion.
Last November, ADNOC and the UAE’s Mubadala Investment Company reached a framework agreement to jointly explore global growth opportunities to build on Mubadala’s portfolio of refining and petrochemicals assets and support ADNOC’s ambitions in the international downstream market.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.