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06 October 2019
INVESTMENT

ADNOC to kick off $5 billion gas pipeline lease deal

The sale is likely to draw interest from infrastructure funds and private equity firms, the state-owned oil producer aims to reach an agreement in the first half of next year.

Bloomberg/ Christopher Pike


Abu Dhabi National Oil Company (ADNOC) has kicked off the potential sale of a stake in its natural gas pipelines, in a deal that could fetch about $5 billion, reported Bloomberg.

The Abu Dhabi-owned energy giant, the producer of around a tenth of Organisation of Petroleum Exporting Countries’ (OPEC) oil, is seeking to bring in outside investors to take a minority interest in the gas pipeline network. The company has started a formal process and sent information on the assets to potential bidders.

The UAE is among Arabian Gulf oil producers that are deploying their energy riches as a magnet for fresh capital. ADNOC already raised funds by leasing out crude pipelines and listing shares in its service stations business, now the company is lining up partners to boost gas output and expand refining and chemical operations.

Saudi Arabia is taking a different track, selling a stake its oil producer to pump cash into local industries and other investments.

Sultan Al Jaber, the Chief Executive Officer of ADNOC, said that the firm seeks to offer new opportunities for investment and partnerships that bring money to the UAE.

Any deal could value the gas pipelines at more than $15 billion including debt. ADNOC may structure the transaction as a long-term lease giving investors a return over a certain time period, rather than offering a direct equity stake in the assets.

In a deal earlier this year, ADNOC raised $4.9 billion from investors including KKR & Co., BlackRock as well as Singapore sovereign wealth fund, GIC, and the Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF) through selling an interest in its oil pipeline business.


RELATED STORIES: KKR & CO. ADNOC ORGANISATION OF PETROLEUM EXPORTING COUNTRIES ABU DHABI NATIONAL OIL COMPANY BLACKROCK GIC ADRPBF NATURAL GAS PIPELINES


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