Virus inflates allure of Abu Dhabi gas pipelines

NH Investment & Securities Co

23/06/2020 15:32

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By George Hay
    LONDON, June 23 (Reuters Breakingviews) - The emirate’s oil
giant ADNOC has sold 49% of its infrastructure arm to investors
including GIC and Brookfield. A $21 bln valuation is higher than
mooted before Covid-19. That’s probably because the virus has
made a combination of secure assets and leverage even more
appealing. 
    Full view will be published shortly.
    On Twitter https://twitter.com/gfhay
    
    
    CONTEXT NEWS
    - The Abu Dhabi National Oil Company (ADNOC) said on June 23
it was selling a 49% stake in its gas pipeline network to a
consortium of investors in a deal that values the assets at
$20.7 billion.
    - Global Infrastructure Partners, Brookfield Asset
Management, Singaporean sovereign wealth fund GIC, Ontario
Teachers’ Pension Plan Board, NH Investment & Securities and
Italian energy group Snam will become co-owners of ADNOC Gas
Pipelines, a newly formed subsidiary of ADNOC with lease rights
to 38 pipelines covering a total of 982 kilometres. ADNOC will
retain a 51% majority stake. 
    - ADNOC will lease its ownership interest in the assets to
ADNOC Gas Pipelines for 20 years in return for a tariff that
will vary depending on the volumes of gas that flow through the
pipeline. The tariff is to be subject to a floor and a cap.
ADNOC said the transaction would result in upfront proceeds of
over $10 billion.
    - Snam said the consortium had obtained approximately $8
billion in funding from a pool of international banks. The
Italian company said its equity contribution was $250 million,
with other members of the consortium making a similar investment
and GIP holding a larger stake.    
    - For previous columns by the author, Reuters customers can
click on  HAY/ 
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
UAE's ADNOC signs multi-billion-dollar pipeline infrastructure
deal     urn:newsml:reuters.com:*:nL8N2E00R4
ADNOC statement    https://www.adnoc.ae/en/news-and-media/press-releases/2020/adnoc-announces-$20-billion-energy-infrastructure-deal
BREAKINGVIEWS-Sovereign funds are having their rainy-day moment 
   urn:newsml:reuters.com:*:nL4N2DZ0A0
BREAKINGVIEWS-Dubai bailout would spark a complex quid-pro-quo  
   urn:newsml:reuters.com:*:nL8N2BV2O2
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Peter Thal Larsen and Karen Kwok)
 ((george.hay@thomsonreuters.com; Reuters Messaging:
george.hay.thomsonreuters.com@reuters.net))