MOSCOW (MRC) -- Abu Dhabi National Oil Co., the UAE's biggest energy producer, has recently inked a USD20.7 billion deal with a group of investors to acquire a 49% stake in its gas pipelines a year after striking a similar transaction for its oil pipelines, reported S&P Global.
A consortium grouping Global Infrastructure Partners, or GIP, Brookfield Asset Management, Singapore's sovereign wealth fund GIC, Ontario Teachers' Pension Plan Board, South Korea's NH Investment & Securities and Italy's Snam will invest in select ADNOC gas pipeline assets valued at USD20.7 billion, ADNOC said in a statement on June 23.
The consortium will collectively hold a 49% stake in ADNOC Gas Pipelines, a newly-formed ADNOC unit, with the parent company holding the remaining interest.
ADNOC Gas Pipelines will lease rights to 38 pipelines spanning a total area of 982.8 km, the company added.
"The innovative transaction structure allows ADNOC to tap new pools of global institutional investment capital, whilst at the same time maintaining full operating control over the assets included as part of the investment," it said.
"ADNOC will lease its ownership interest in the assets to ADNOC Gas Pipelines for 20 years in return for a volume-based tariff. The transaction will result in upfront proceeds of over USD10 billion to ADNOC and is subject to customary closing conditions and regulatory approvals."
ADNOC clinched last year a USD5 billion deal, with a consortium that includes GIC, BlackRock Inc., KKR & Co and Abu Dhabi Retirement Pensions and Benefits Fund, to invest in select pipeline infrastructure and collectively hold a 49% stake in ADNOC Oil Pipelines, a subsidiary of the parent company.
ADNOC Oil Pipelines will lease the national oil company's interest in 18 pipelines and give rights to transport crude and condensates from the company's onshore and offshore concessions over 23 years.
The transaction was the first midstream partnership between institutional investors and a Middle East national oil company.
The gas pipeline network links ADNOC's upstream assets to local UAE off-takers, while ownership and management of the pipeline and all responsibility associated with operation and capital expenditures will remain with ADNOC, it said.
"The strategic joint venture will see ADNOC pay ADNOC Gas Pipelines a volume-based tariff for the use of pipelines that transport sales gas and natural gas liquids (NGL) from ADNOC's upstream assets to Abu Dhabi's key outlets and terminals," it said. "The tariff will be charged on the total volumes transported through the pipelines, together with liquefied natural gas (LNG) flows, subject to a volume cap."
ADNOC Gas Pipelines will distribute 100% of free cash to the investors in the form of quarterly dividends, it added.
As MRC informed earlier, in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.