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Abu Dhabi Invests $2.1B in Adnoc Pipelines

Abu Dhabi institutional investors are paying $2.1 billion for a stake in a natural gas pipelines unit run by Abu Dhabi National Oil Co., adding to the cash the government energy producer has raised from infrastructure assets.

Abu Dhabi Pension Fund and holding company ADQ will take an indirect stake in the pipelines unit Adnoc set up earlier this year, the oil and gas company said in a statement. Adnoc is doing the transaction at the same price as a deal in June, when it agreed to sell a stake in the gas pipelines business to international investors and valued the business at $20.7 billion.

Adnoc has been raising cash from its assets under a financial and organizational restructuring the company started four years ago. Abu Dhabi, capital of the United Arab Emirates -- the third-largest oil producer in OPEC, is using its hydrocarbon wealth to attract investors to the country and generate cash from new sources.

Adnoc has raised money from infrastructure including the pipelines and real estate assets at a time when energy producers are struggling with oil prices that are down about 35% so far this year. The coronavirus pandemic crushed global energy demand due to lockdowns and a plunge in air traffic. While demand is recovering, it hasn’t returned to previous levels.

In the June transaction, Adnoc sold a 49% stake worth $10.1 billion in the pipelines to a group of six investors including Global Infrastructure Partners, Brookfield Asset Management Inc. and Singapore’s sovereign wealth fund, GIC Pte. The 38 pipelines spanned almost 1,000 kilometers (621 miles).

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