Global investment firm KKR has acquired a minority stake in ADNOC Gas Pipeline Assets LLC, the gas pipeline network of Abu Dhabi’s national oil company, in a move signaling growing investor confidence in infrastructure opportunities in the oil and gas-rich Middle East.
The new investment, the value of which was not disclosed, strengthens KKR’s long-term strategic partnership with the Abu Dhabi National Oil Company (ADNOC), and reflects the firm’s confidence in Abu Dhabi’s competitiveness as a premier global investment destination, the private equity giant said on Wednesday.
The gas pipeline network connects ADNOC’s upstream assets to local off-takers in the United Arab Emirates (UAE). Pipeline ownership and operational management remain with ADNOC.
The deal for a minority stake in ADNOC’s gas pipelines assets follows the first such transaction in the Middle East, when KKR bought in 2019 a minority stake in ADNOC’s oil pipelines business. The 2019 acquisition of 40% in ADNOC Oil Pipelines by KKR and BlackRock was the first-ever investment of foreign asset managers in infrastructure of a state-owned energy firm in the Gulf.
Last year, KKR and BlackRock sold the 40% stake in ADNOC Oil Pipelines LLC to Abu Dhabi-based alternative investment manager Lunate.
Commenting on the deal for ADNOC’s gas pipeline infrastructure, General David Petraeus, chairman of KKR Middle East, said today that “This investment reflects KKR’s commitment to expand partnerships and investment across the Middle East. The region’s strong fundamentals, bold vision, and focused leadership offer increasingly attractive opportunities for global investors.”
Earlier this year, Saudi Arabia’s oil giant Aramco signed an $11 billion lease and leaseback deal involving its Jafurah gas processing facilities with a consortium of international investors, led by funds managed by Global Infrastructure Partners (GIP), a part of BlackRock.
Jafurah, the largest non-associated gas development in Saudi Arabia, is a key part of Aramco’s plans to increase gas production capacity by 60% between 2021 and 2030, to meet rising demand.
By Tsvetana Paraskova for Oilprice.com
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