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ADNOC closes landmark pipeline infrastructure investment with KKR and BlackRock

Christian Fernsby |
The Abu Dhabi National Oil Company, ADNOC, announced that it has closed its pipeline infrastructure investment agreement with BlackRock and KKR.

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The transaction was originally announced in February of this year when KKR and BlackRock signed an initial investment agreement to invest $4 billion into the midstream pipeline assets.

Following this announcement the Abu Dhabi Retirement Pensions and Benefits Fund, ADRPBF, agreed to invest a further $300m.

The ADRPBF investment is due to close in the next quarter.

The KKR and BlackRock investment, which was successfully funded through their global infrastructure funds and financed by a syndicate of international banks, was oversubscribed during its syndication.

The innovative leasing investment structure marks the first time that leading, global and domestic institutional investors have deployed long-term equity capital into key midstream infrastructure assets of a national oil company in the UAE.

This agreement will see BlackRock and KKR acquire a combined 40% stake in a newly formed entity, ADNOC Oil Pipelines Sole Proprietorship with ADRPBF acquiring 3% and ADNOC holding the remaining 57%.

ADNOC Oil Pipelines leases 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.

The entity receives a tariff payable by ADNOC, for its share of volume of crude and condensate that flows through the pipelines, backed by minimum volume commitments.

Sovereignty over the pipelines and management of pipeline operations remain with ADNOC.

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