Abu Dhabi Pension Fund and ADQ to Invest $2.1 Billion in Gas Pipelines

The Abu Dhabi Pension Fund (ADPF) and holding company ADQ have made a $2.1 billion investment in the state’s gas pipeline assets.

The state pension fund and holding company will take a one-fifth stake in the gas pipeline assets owned by the Abu Dhabi National Oil Company (ADNOC), which oversees 38 pipelines spanning 610 miles, the state-owned oil company ADNOC said last week.

“The addition of these high-caliber UAE investors sets a new benchmark for leading global and domestic institutional investors to deploy long-term equity capital into key ADNOC energy infrastructure assets,” the UAE Minister of Industry and Advanced Technology and ADNOC Group CEO Dr. Sultan Al Jaber said in a statement.

The two have joined a consortium of yield-seeking global investors who took stakes in the ADNOC Gas Pipelines subsidiary earlier this summer. Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, New York-based Global Infrastructure Partners (GIP), NH Investment and Securities, Italy’s Snam, and the Ontario Teachers’ Pension Plan Board (OTPPB) have jointly invested $10.1 billion to gain a 49% stake in the assets.

It’s the second time the ADPF has entered an investment partnership for ADNOC’s infrastructure assets. Last year, the pension fund made a $300 million investment into some of the firm’s oil pipelines. Over the summer, ADNOC and ADQ also entered a joint venture to fund industrial projects within oil and natural gas complex Ruwais Derivatives Park.

The UAE government is trying to raise funds from investors after taking a battering from low interest rates, low oil prices, and the continued disruptions from the pandemic. Investors are hoping pipeline companies that are often paid high fees from their assets will generate high dividends.

ADNOC will maintain ownership and continue operating the pipeline assets. The transaction is expected to close later this month.