Abu Dhabi National Oil Company acquired a 10 per cent equity stake in Dutch storage terminal operator VTTI, a deal that will enhance its market access to Asia, Africa and Europe.
State-owned Adnoc said it would also secure additional storage capabilities at Fujairah, the world's second-largest bunkering hub. The value of the transaction was not disclosed.
VTTI, in which Australia's IFM Investors and Dutch commodity trader Vitol are stakeholders with 45 per cent interest each, owns 15 hydrocarbons storage terminals in 14 countries.
IFM Investors is invested in the company through its IFM Global Infrastructure Fund, while Vitol’s participation is through its vehicle, Vitol Investment Partnership II.
VTTI has a collective storage capacity of 60 million barrels in Malaysia, Belgium, Croatia, South Africa, the Netherlands, Virgin Islands, Nigeria, Panama, Pakistan, the US, Argentina, Latvia, the UAE, Kenya and Cyprus.
"This strategic investment opportunity in VTTI, alongside Vitol and IFM GIF will further complement the development of Adnoc's integrated global trading platform while also delivering a solid financial return," said Dr Sultan Al Jaber, Adnoc Group chief executive and UAE Minister of State.
"VTTI’s diverse portfolio of storage assets across key target markets such as Asia, Africa and Europe, provides us with direct access to our customers around the world, a key building block to accelerating Adnoc’s transformation into a more integrated and commercially-minded global energy player,” he said.
In Fujairah, VTTI owns 1.6 million cubic metre capacity in storage with 52 tanks and 11 jetties. It also operates an 80,000 barrel per day capacity refinery and a crude processing unit with similar capacity. Crude, condensate, naphtha, gas oil, jet fuel, kerosene and fuel oil are among products handled at VTTI's Fujairah facility.
Adnoc is building the world's largest single-site underground project for oil storage in Fujairah, with a capacity to store up to 42 million bpd of crude. The state oil company already has 8 million bpd storage capacity in Fujairah, and the planned underground cavern facility will allow greater flexibility in supplying crude to market.
The investment in Fujairah through VTTI further strengthens the company’s “strategic position” in the northern emirate besides accelerating its development as a hub for Adnoc’s operations, said Dr Al Jaber.
VTTI will continue to be led by an independent management under the leadership of chief executive Rob Nijst.
Fujairah, which faces the Gulf of Oman and is located outside the congested Strait of Hormuz, is an important storage facility for international and national oil companies. Storage capacity at the Port of Fujairah is expected to increase by 75 per cent from the current 10.5 million cubic metres by 2022, according to S&P Platts.
The deal is the second in the midstream segment for Adnoc, which earlier this year leased 40 per cent of pipeline infrastructure to global asset managers BlackRock and KKR in a $4 billion transaction.
The agreement marked the first time that leading international financial institutions were able to make investments related to Adnoc's midstream assets through a competitive selection process. The Singaporean sovereign wealth fund GIC joined as a co-investor last month, pushing the total value of the deal to $5bn.
Last week, Adnoc completed partnership agreements with Italian and Austrian energy companies Eni and OMV, under which they will take stakes of 20 and 15 per cent, respectively, in its refining unit. It has also established a trading joint venture with the two partners.
