Key Takeaways
- • Lunate, an Abu Dhabi-based alternative asset manager, acquired a 40% stake in ADNOC Oil Pipelines LLC from BlackRock and KKR through its Long Term Capital Fund, marking a major infrastructure investment in the energy sector.
- • BlackRock and KKR divested their 40% stake in ADNOC Oil Pipelines approximately five years after their initial $4 billion investment in 2019, returning capital from the midstream infrastructure asset.
- • ADNOC Oil Pipelines operates 22 pipelines spanning 806 kilometres across onshore and offshore locations in the UAE, with a combined capacity of 18 million barrels per day under a 23-year concession agreement with ADNOC.
- • The transaction strengthens Lunate's real assets portfolio and positions the firm as a significant player in regional energy infrastructure, with the pipeline network serving as critical midstream infrastructure connecting energy reserves to global export terminals.
- • ADNOC retains the remaining 60% ownership stake in the pipeline infrastructure asset, maintaining control of this strategically important national energy resource.
Summary
Lunate, an Abu Dhabi-based global alternative investment manager, has acquired a 40% stake in ADNOC Oil Pipelines LLC from institutional investors BlackRock and KKR, according to an announcement on April 3, 2024. The acquisition was executed through Lunate's Long Term Capital Fund, which aims to provide investors with attractive cash yields and long-term capital appreciation. The transaction involved the purchase of a 100% stake in a special purpose vehicle jointly held by BlackRock and KKR managed funds, completing the two firms' exit from the infrastructure asset approximately five years after their initial $4 billion investment in 2019.
ADNOC Oil Pipelines was established in 2019 to lease ownership interests in pipeline infrastructure from the Abu Dhabi National Oil Company under a 23-year concession agreement. The entity operates 22 pipelines—17 onshore and 5 offshore—covering a total distance of 806 kilometres across the UAE region, with a combined capacity of 18 million barrels per day. These pipelines represent critical midstream crude oil infrastructure that connects regional energy reserves to export terminals, supporting global energy supply chains. ADNOC retains the remaining 60% ownership interest in AOP, maintaining control of this strategically important national energy asset.
For Lunate, the acquisition marks a significant expansion into premium pipeline infrastructure and strengthens the firm's real assets portfolio. According to Murtaza Hussain, Managing Partner at Lunate, the transaction reflects a partnership with ADNOC, described as a leading energy group and national champion. The Long Term Capital Fund, through which Lunate made the investment, is positioned to benefit from stable, long-term cash flows generated by the pipeline concession, aligning with the fund's investment objectives. The deal underscores the continued institutional interest in diversified, cash-generative energy infrastructure assets in the Gulf region, particularly midstream infrastructure that provides relative stability compared to upstream or downstream energy segments.
ADNOC Oil Pipelines was established in 2019 to lease ownership interests in pipeline infrastructure from the Abu Dhabi National Oil Company under a 23-year concession agreement. The entity operates 22 pipelines—17 onshore and 5 offshore—covering a total distance of 806 kilometres across the UAE region, with a combined capacity of 18 million barrels per day. These pipelines represent critical midstream crude oil infrastructure that connects regional energy reserves to export terminals, supporting global energy supply chains. ADNOC retains the remaining 60% ownership interest in AOP, maintaining control of this strategically important national energy asset.
For Lunate, the acquisition marks a significant expansion into premium pipeline infrastructure and strengthens the firm's real assets portfolio. According to Murtaza Hussain, Managing Partner at Lunate, the transaction reflects a partnership with ADNOC, described as a leading energy group and national champion. The Long Term Capital Fund, through which Lunate made the investment, is positioned to benefit from stable, long-term cash flows generated by the pipeline concession, aligning with the fund's investment objectives. The deal underscores the continued institutional interest in diversified, cash-generative energy infrastructure assets in the Gulf region, particularly midstream infrastructure that provides relative stability compared to upstream or downstream energy segments.
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