Oil & Gas

28 Jun 2020

UAE: Snam with Consortium Acquires 49% Of ADNOC Gas Pipelines

28 Jun 2020  by PWKD   

Snam, partnering with some of the most important international investment funds, has reached an agreement with the Abu Dhabi National Oil Company (ADNOC), one of the largest energy operators in the world, for an investment in the energy infrastructure of the United Arab Emirates.

As per the agreement, the consortium, in which Snam is joined by Global Infrastructure Partners (GIP), Brookfield Asset Management, GIC (the sovereign wealth fund of Singapore), Ontario Teachers’ Pension Plan and NH Investment & Securities, acquires 49% of ADNOC Gas Pipeline Assets LLC (ADNOC Gas Pipelines), a company that holds, for a period of 20 years, the tariff-based rights for the infrastructure (38 pipelines) that connects ADNOC’s upstream activities to Abu Dhabi’s consumption points and the export and interconnection terminals to neighboring Emirates. ADNOC will control the remaining 51% of ADNOC Gas Pipelines.

One of the most important ever registered in the global energy infrastructure sector and the first acquisition undertaken by Snam outside of Europe, the transaction values 100% of ADNOC Gas Pipelines at approximately 20.7 billion dollars (10.1 billion dollars for its 49%). Nearly 8 billion dollars was received by the consortium in funding from a pool of international banks. The equity contribution is distributed proportionally among the members of the consortium, who all hold equal shares with the exception of the leader, GIP. For Snam, the outlay with its own funds will amount to approximately 250 million dollars.

This is an important investment opportunity in a strategic energy infrastructure, for the consortium, of which Snam is the only industrial operator.

"We are pleased to once again partner with some of the world’s leading global infrastructure and institutional investors in what marks the region’s largest energy infrastructure investment. This milestone transaction demonstrates the trust and confidence placed in ADNOC by the global investment community and unlocks significant value from our pipeline portfolio, following last year's groundbreaking oil pipeline infrastructure investment agreement,” said His Excellency Dr. Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO. “Today’s landmark investment signals continued strong interest in ADNOC’s low-risk, income-generating assets, and sets another benchmark for large-scale energy and infrastructure investments in the UAE and the wider region. It solidifies ADNOC’s position as an attractive partner and reinforces the UAE’s track record as the region’s go-to foreign direct investment destination, even during the current unprecedented circumstances."

Snam CEO, Marco Alverà, remarked that with this strategic transaction, they strengthen their international footprint by entering a country and a region that are key to the energy sector, further consolidating Italy’s role in the Gulf area. “Our aim is to promote further cooperation opportunities, particularly in the energy transition. We will work with ADNOC and the Consortium partners by leveraging our industrial skills, know-how and innovative solutions in natural gas infrastructure management and provide our contribution to the UAE’s energy system. This transaction was carried out completely from remote over the past months, testifying the resilience of our company and its willingness to continue its growth path of the past several years," said Mr. Alverà.

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