Italian-based multinational energy infrastructure company Snam has partnered with five international funds to enter the United Arab Emirates’ energy market.
The five international funds are Global Infrastructure Partners (GIP), Brookfield Asset Management, Singapore’s GIC, Ontario Teachers’ Pension Plan and NH Investment & Securities.
Snam chief executive Marco Alverà said the deal would allow Snam to “strengthen our international footprint by entering a country and a region that are key to the energy sector, further consolidating Italy’s role in the Gulf area”.
The consortium has entered into an agreement with the Abu Dhabi National Oil Company to acquire 49% of ADNOC Gas Pipeline Assets LLC for $10.1 billion. In total, ADNOC’s pipelines are worth $20.7 billion.
ADNOC holds the tariff-based rights for 38 pipelines connecting ADNOC’s upstream activities to Abu Dhabi’s consumption points and the export and interconnection terminals to neighboring Emirates for a period of 20 years.
The acquisition is said to be one of the most important ever registered in the global energy infrastructure sector, and is SNAM’s first outside of Europe.
SNAM and its partners obtained approximately $8 billion in funding for the acquisition from a pool of international banks and the deal is expected to be closed by the end of July.
Snam boss Alverà said, “Our aim is to promote further cooperation opportunities, particularly in the energy transition. We will work with ADNOC and the consortium partners by leveraging our industrial skills, know-how and innovative solutions in natural gas infrastructure management and provide our contribution to the UAE’s energy system.”
He explained that because of coronavirus restrictions, the transaction “was carried out completely from remote over the past months, testifying the resilience of our company”.
Dr Sultan Al Jaber, UAE Minister of State and ADNOC Group chief executive, said the deal marks the Emirates’ largest energy infrastructure investment.
“This milestone transaction demonstrates the trust and confidence placed in ADNOC by the global investment community and unlocks important value from our pipeline portfolio.”
He added that the investment “signals continued strong interest in ADNOC’s low-risk, income-generating assets, and sets another benchmark for large-scale energy and infrastructure investments in the UAE and the wider region.
“It solidifies ADNOC’s position as an attractive partner and reinforces the UAE’s track record as the region’s go-to foreign direct investment destination, even during the current unprecedented circumstances.”