Page 5 - MEOG Week 42

MEOG COMMENTARY MEOG

barrel allocation at the nearby Mangalore facility international bond issuance through the Abu
during the same month. Dhabi Crude Oil Pipeline Co. (ADCOP) sub-
On October 17, the Indian cabinet gave sidiary, an IPO in retail unit ADNOC Distribu-
permission for ADNOC to export crude it tion, and the sale of minority stakes in ADNOC
has sitting in storage held by Indian Strategic Drilling as well as the refining deal.
Petroleum Reserves Ltd. (ISPRL). The reserve Later that year, BlackRock and KKR were
has a current crude storage capacity of 4.55mn joined in the pipeline JV by the Abu Dhabi
tonnes (33.4mn barrels) and is full. Meanwhile, Retirement Pensions and Benefits Fund
the commercial quantity – the volume available (ADRPBF) and Singapore’s sovereign wealth
for marketing by ADNOC – was recently raised fund GIC, with the latter acquiring a 6% stake
from 35% to 50%. India sees this as an opportu- for $600mn.
nity to turn the country into a hub for re-export, July 2020 was a busy month for ADNOC as
while ADNOC has around 17mn barrels availa- the company signed a JV agreement with hold-
ble for sale from strategic locations in India. ing company ADQ to create a new investment
Also last week, the company last week platform to fund and oversee the development of
acquired two very large crude carriers (VLCCs) industrial projects in the planned Ruwais Deriv-
through its shipping unit ADNOC Logistics and atives Park.
Services, marking its entry into the VLCC sector. ADNOC then agreed a deal to sell a mul-
The units, Hunter Laga and Hunter Saga, were ti-billion-dollar stake in its natural gas pipelines
bought from Hunter Group for $84mn each. to an investor group backed by Global Infra-
Data from VesselsValue shows that ADNOC structure Partners (GIP) and Brookfield Asset
Logistics and Services owns six bulkers, three Management in a deal that valued the pipelines
containerships, nine tankers, eight LNG carriers at more than $15bn, including debt. The GIP
and one LPG carrier. consortium also includes Italian infrastructure
operator Snam SpA, Ontario Teachers’ Pension
Control Plan, Singapore sovereign fund GIC and South
The moves further emphasise ADNOC’s efforts Korea’s NH Investment & Securities Co. The
to control the entire hydrocarbon value chain consortium acquired a collective 49% stake in
for its production, and by monetising assets and ADNOC Gas Pipeline Assets (ADNOC Gas
infrastructure, it has raised billions of dollars, Pipelines) for $10.1bn. The gas subsidiary holds
inspiring fellow NOCs in the region to follow its lease rights to 38 gas pipelines covering a total
lead. of 982 km.
The company’s innovative approach to cash- Last week, the Abu Dhabi Pension Fund
ing in on its assets is best demonstrated by the (ADPF) and ADQ agreed to invest $2.1bn
‘lease out and rent back’ premise of deals relating into select ADNOC gas pipeline infrastructure
to its oil and gas pipeline networks. assets. The deal will see ADNOC divesting 20%
In February 2019, US private equity giants in ADNOC Gas Pipelines HoldCo, the wholly
BlackRock and KKR acquired a 40% stake for owned subsidiary that holds 100% of its interest
$4bn in ADNOC Oil Pipelines. The newly in ADNOC Gas Pipelines, to ADPF and ADQ.
formed venture was assigned long-term leases This leaves ADNOC with a stake of 40.8% in
for 18 of ADNOC’s domestic crude oil and ADNOC Gas Pipelines having raised $12.2bn
condensate pipelines. The move followed an for the 59.2% it has either sold or leased.™

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