Adnoc has secured $11 billion in structured financing from 20 banks to monetise midstream assets associated with its Hail and Ghasha offshore gas production.
Adnoc and its partners on the concessions, Italy's Eni and Thailand's PTT Exploration and Production Public Company, opted for non-recourse financing, the Abu Dhabi energy company said on Thursday.
In non-recourse financing, the lenders are paid directly from the project's cash flow and not from the balance sheet of concession operators.
Hail and Ghasha are large offshore gas concessions expected to produce up to 1.8 billion standard cubic feet per day of gas. First gas from the project is expected by the end of the decade.
A source close to the deal said it was pre-export finance, arranged years before the concessions are expected to start producing gas.
The project’s gas processing sites were separated from the concession to enable the financing, which was 1.5 times oversubscribed, with strong interest from Asia, the source said.
Chinese lenders Industrial and Commercial Bank of China, Agricultural Bank of China and Bank of China were part of the deal, which also saw participation from seven local banks.
The funds from the deal will be available in “staggered phases” to help build gas processing plants, which would include sulphur separators for the ultra-sour gas concessions.
Russia’s Lukoil exited its 10 per cent stake in the concession last month. Adnoc said it had since absorbed the stake.
The funding has allowed the companies to “secure upfront value at a competitive rates”, Adnoc said.
The transaction will accelerate Hail and Ghasha's continuing gas development plans, said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.
“Hail and Ghasha is an important contributor to Adnoc's gas strategy,” he said.
The project was “on track” to supply new gas resources for Adnoc customers, he added.
Adnoc said the financing could be replicated on other large-scale greenfield projects.
National oil companies in the region have made similar moves to monetise midstream assets, which allows them to retain ownership while securing upfront capital.
In August, Saudi Aramco signed an $11 billion lease and leaseback agreement with a consortium led by Global Infrastructure Partners for gas processing sites associated with Jafurah – its large offshore unconventional gasfield. In lease and leaseback, a company sells an asset to an investor while leasing it back at the same time.
In 2021, it signed a $15.5 billion leaseback agreement with BlackRock Real Assets and Hassana Investment Company to sell a 49 per cent interest in its gas pipeline network.
Adnoc has also monetised its pipeline network through other deals. In 2020, the company sold a 49 per cent stake in its gas pipeline assets for $10.1 billion to a group of global investors including Global Infrastructure. It also secured $4.9 billion in 2019 after selling a 49 per cent stake in its oil pipelines to a consortium led by BlackRock and KKR.
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President Sheikh Mohamed with Adnoc employees after a board of directors meeting at the Habshan Complex. With him was Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and managing director and group chief executive of Adnoc. All photos: UAE Presidential Court -
Sheikh Mohamed with Adnoc workers at Habshan Complex -
Sheikh Mohamed listens to a presentation before the Adnoc board of directors meeting -
Sheikh Mohamed with Adnoc employees -
Sheikh Mohamed chairs the Adnoc board of directors meeting -
Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council, speaks with Suhail Al Mazrouei, Minister of Energy and Infrastructure -
Sheikh Mansour bin Zayed, Vice President, Deputy Prime Minister and Chairman of the Presidential Court, at the board of directors meeting -
The Adnoc logo and UAE flags at the Habshan Complex
