Abu Dhabi-based global alternative investment management company Lunate has acquired a 40 per cent stake in Adnoc Oil Pipelines (AOP) from BlackRock and KKR.
The acquisition, made by one of Lunate's funds, was executed through the purchase of a 100 per cent stake in a special purpose vehicle (SPV) jointly held by the two institutional investors' managed funds, Lunate said on Wednesday.
“We are pleased to partner with Adnoc, [which] continues to raise the bar for innovation and efficiency in global energy markets,” said Murtaza Hussain, managing partner at Lunate.
“Lunate’s investment in AOP aligns with our long-term capital strategy to identify and invest in premium infrastructure assets.”
Adnoc Oil Pipelines was set up in 2019 to lease ownership interests in 22 pipelines from Adnoc for 23 years through a concession agreement.
The pipelines include 17 onshore and five offshore pipelines across the region, covering 806km with a total capacity of 18 million barrels per day.
The stake acquisition comes nearly five years after BlackRock, the world’s largest asset manager, as well as global private equity firm KKR paid $4 billion upfront through a SPV to invest in Adnoc’s pipeline assets.
The deal signalled the first investment by international financial institutions in the infrastructure of a state-owned energy company in the Gulf region.
With $105 billion in assets under management, Lunate was launched by Chimera Investment, an Abu Dhabi-based private organisation, in September last year.
The company, based at the Abu Dhabi Global Market, has interests in private equity, venture capital, private credit, real assets, public equities and public credit markets.
In November, Lunate and US-based investment bank BNY Mellon announced an investment of $300 million in Alpheya, an ADGM-based wealth technology company.
Global investment firms are increasingly prioritising environmental, social and governance (ESG) factors in their investment decisions, prompting some of them to divest from oil and gas companies, and invest in renewable energy projects and energy transition initiatives.
BlackRock, for instance, is among the institutional investors backing the UAE’s $30 billion climate fund called Alterra, which aims to raise $250 billion globally in the next six years.
In December, BlackRock announced an investment of up to $400 million in Dubai-based decarbonisation company Positive Zero through a diversified infrastructure fund.
Adnoc, which is responsible for nearly all of the UAE’s oil and gas production, initiated the highest number of new low-carbon projects among both international and national oil companies, according to an Energy Intelligence report in February.
This comes amid a sharp decline in low-carbon spending in the global oil and gas sector last year, as energy majors focused on profitability and meeting the demand for fossil fuels.
In January, Adnoc’s board increased the company’s allocation for decarbonisation projects and technologies, and lower-carbon solutions to $23 billion from $15 billion previously.
