Brookfield, Global Infrastructure Partners in talks to team up for ADNOC gas pipelines

Global Infrastructure Partners and Brookfield Asset Management Inc. are among investors in talks to jointly bid for a stake in Abu Dhabi National Oil Co.’s natural gas pipelines, which could be valued at about US$15 billion, people with knowledge of the matter said.

Italian infrastructure operator Snam SpA, Ontario Teachers Pension Plan, Singapore sovereign fund GIC Pte and a Korean firm are in discussions to join the same consortium, which has been pursuing as much as a 49 per cent stake in the assets, the people said.

The group is the only remaining bidder for the stake — which could rank as one of this year’s largest infrastructure deals globally — after other parties including Australian fund manager IFM Investors Pty dropped out, the people said. A final deal will depend on whether the consortium can secure financing, which has become more difficult to obtain due to tightening credit markets and the decline in oil, they said.

The potential investors are currently conducting due diligence on the assets, the people said. No final agreements have been reached, and the makeup of the bidding group could change, the people said.

Representatives for ADNOC, IFM, Ontario Teachers and Snam declined to comment. Brookfield, GIC and GIP didn’t immediately respond to requests for comment.

The United Arab Emirates, of which Abu Dhabi is the capital, is among Persian Gulf oil producers using their energy assets to draw fresh capital to the region. ADNOC has already raised funds by leasing out its crude pipelines and selling shares in its service stations business. Several investors had submitted initial bids for the gas pipeline asset, Bloomberg News reported last month.

KKR & Co. and BlackRock Inc. last year agreed to invest US$4 billion in ADNOC’s oil pipeline network, securing two decades of guaranteed returns. GIC also bought a stake in the business later. ADNOC has also sold a stake in its US$11 billion drilling business to Baker Hughes Co.

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