Deals and IPOs

In 2020's biggest energy deal, six global firms strike $20 billion agreement with Abu Dhabi state oil giant

Key Points
  • The deal is the single-largest energy infrastructure investment in the region, and the biggest in the world in 2020. It brings $10.1 billion in foreign direct investment to the UAE.
  • The six companies involved are Global Infrastructure Partners, Brookfield Asset Management, Singapore's sovereign wealth fund GIC, Ontario Teachers' Pension Plan Board, NH Investment & Securities and Snam.
  • As part of the agreement, the consortium will acquire a 49% stake in a newly-formed subsidiary, ADNOC Gas Pipeline Assets, with lease rights to 38 pipelines. ADNOC will hold the majority stake of 51% and will retain ownership of the pipelines.
VIDEO3:2403:24
Abu Dhabi state oil firm announces $20.7 billion energy infrastructure deal

A consortium of six global investors has entered into a $20.7 billion agreement with Abu Dhabi National Oil Company (ADNOC), the state-owned oil company said Tuesday. 

As part of the agreement, the group will invest $10.1 billion to acquire a 49% stake in a newly-formed subsidiary, ADNOC Gas Pipeline Assets, with lease rights to 38 pipelines. ADNOC will hold the majority stake of 51% and will retain ownership of the pipelines. It will also manage operations and remain responsible for capital expenditure.

It is the single-largest energy infrastructure investment in the region, and the largest in the world in 2020, according to Abu Dhabi National Oil Company. It is also part of the UAE national oil company's strategy to attract foreign capital and maximize the value of its assets.

The six companies involved are Global Infrastructure Partners, Brookfield Asset Management, Singapore's sovereign wealth fund GIC, Ontario Teachers' Pension Plan Board, NH Investment & Securities and Snam. 

"We are excited to have completed this deal, and once again partner with some of the word's leading infrastructure and institutional investors," said Sultan al-Jaber, chief executive officer of ADNOC Group and UAE's minister of state.

"It is in fact a huge achievement, particularly given the current challenging economic climate and business environment, and it is, if anything, a testament to Abu Dhabi and the UAE's position as a trusted, reliable and credible investment destination," he told CNBC's Hadley Gamble.

Al-Jaber said the deal would allow ADNOC to reinvest responsibly and finance activities that produce higher returns.

"Importantly, by completing this landmark transaction, we are sending a very strong signal to other potential partners from around the world, that ADNOC continues to be open and in fact, very ready for business," he added.

VIDEO3:1803:18
ADNOC CEO on $20.7 billion energy infrastructure deal

"We will continue to develop and explore additional investment opportunities across our value chain that provide an attractive risk-return profile to high quality, long-term investors."

Separately, al-Jaber said there are signs that the oil market is tightening, driven by OPEC+ production cuts and demand recovery around the world. 

Oil prices have rallied in recent weeks, with the West Texas Intermediate crude crossing the $40 a barrel for the first time since March. In Asia's afternoon on Tuesday, U.S. crude was down 0.54% at $40.51, while Brent crude slid 0.28% to $42.96.

"To me, the journey to the next normal may not be a straight line," he said. "But I believe we are on the right track and on the right path for recovery."