Singapore's GIC enters $4.9bn ADNOC pipeline infrastructure investment agreement

The Abu Dhabi National Oil Company, ADNOC, announced on Tuesday that it has entered into a further follow-on pipeline infrastructure investment agreement with GIC, Singapore’s sovereign wealth fund.

According to a statement, GIC will invest US$600 million in select ADNOC crude pipeline infrastructure, following BlackRock, KKR and the Abu Dhabi Retirement Pensions and Benefits Fund, ADRPBF, who earlier this year signed agreements to invest $4.3 billion in these assets. This takes the combined lease-based investment of GIC, ADRPBF, KKR and BlackRock to $4.9 billion.

This follow-on investment agreement will see GIC acquire a six percent stake in a newly formed entity, ADNOC Oil Pipelines, with BlackRock and KKR together holding 40 percent, ADRPBF three percent and ADNOC the remaining 51 percent.

Sovereignty over the pipelines and management of pipeline operations remain with ADNOC, the statement added, noting that the transaction is expected to close before the end of 2019, subject to customary closing conditions and all regulatory approvals.

The innovative leasing investment structure has seen GIC and other top-tier global and domestic institutional investors deploy long-term capital into ADNOC’s key infrastructure assets.

Commenting on the transaction, Ahmed Jasim Al Zaabi, Group Director Finance and Investment at ADNOC, said, "We are delighted that GIC, one of the world’s most renowned sovereign wealth funds and a leading long-term global investor, has joined KKR, BlackRock and the Abu Dhabi Pensions Fund in this pioneering investment in select ADNOC oil pipelines.

"With nearly $5 billion of total investment, the overall agreement is testimony to the global investment community’s positive view on the attractiveness of both the UAE’s long-term potential, as well as the quality of ADNOC’s substantial infrastructure asset base."

Ang Eng Seng, Chief Investment Officer for Infrastructure at GIC, said, "We are pleased to establish our partnership with ADNOC, a leading operator with a strong track record and an innovative approach. As a global long-term investor, we are confident in the quality of ADNOC’s substantial oil pipeline network, which is a core element of Abu Dhabi’s energy ecosystem. We look forward to supporting ADNOC in the future growth of its oil pipeline business."

Over the last two years, ADNOC has significantly expanded its strategic partnership and co-investment model and created new investment opportunities across all areas of its value chain, while at the same time, more proactively managing its portfolio of assets and capital.

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