The Abu Dhabi National Oil Company (ADNOC) announced entering a landmark multi-billion-dollar midstream pipeline infrastructure partnership with KKR and BlackRock, ADNOC announced on February 24.
The agreement was signed during a ceremony held at ADNOC’s headquarter by Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC CEO; Laurence D. Fink, Chairman and BlackRock CEO; and Henry Kravis, Co-Chairman and Co-CEO of KKR.
“This transaction is another example of the innovative steps we are taking to constantly optimize our assets and capital and deliver sustained value to both ADNOC and the UAE,” Al Jaber said.
Under the transaction, a new entity called ADNOC Oil Pipelines – Sole Proprietorship LLC (ADNOC Oil Pipelines) will be established and managed by BlackRock and KKR, which will collectively hold a 40% interest in the entity, while ADNOC will hold the remaining 60% stake.
The entity will enable the companies for 23 years to own interest in 18 pipelines and transport stabilized crude oil and condensate across ADNOC’s offshore and onshore upstream concessions. In return, the entity will receive a tariff payable by ADNOC for its share of volume of crude and condensate that flows through the pipelines.
The partnership will result in around $4 billion to ADNOC and is expected to close in Q3 2019. In addition, it is subjected to customary closing conditions and all regulatory approvals.
The transaction marks the first time that global institutional investors take interest into key midstream infrastructure assets of a national oil company in the Middle East.