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BlackRock no longer in the race for ADNOC's gas pipeline assets

BlackRock Inc has dropped out of the race to become an investor in Abu Dhabi National Oil Co’s (ADNOC) natural gas pipeline assets, two sources familiar with the matter said.

That leaves Italian infrastructure firm Snam and Global Infrastructure Partners among at least six remaining bidders, they said.

BlackRock, along with buyout firm KKR & Co, last year bought a 40% stake in ADNOC Oil Pipelines for $4 billion, and was also looking at a deal involving ADNOC’s gas pipeline infrastructure, the sources said.

However, it has now decided not to bid for the assets.

“BlackRock is not there anymore,” said one of the sources with knowledge of the matter, adding the timing is not right for the world’s largest fund manager given the global market turmoil linked to the coronavirus outbreak.

ADNOC, BlackRock and Snam declined to comment.

Global Infrastructure Partners did not immediately respond to a Reuters request for comment. The sources declined to be identified because the information was not public.

ADNOC hired Bank of America Merrill Lynch and Mizuho last year to arrange the lease of its natural gas pipeline assets, Reuters reported, citing sources familiar with the matter, as it sought new partnerships in an era of lower oil prices. ADNOC, which manages almost all of the proven oil reserves in the United Arab Emirates, has embarked on a major shake-up over the past few years to cut costs, boost efficiency and monetise its assets.

Snam is looking at ADNOC natural gas pipelines alongside other infrastructure funds such as Global Infrastructure Partners, the two sources said.

There are six to seven bidders in the race, one of the sources said.

“It’s a big price tag, so there could be a big alliance among the various subjects interested,” one of the sources said.

Two other sources said it would makes sense for ADNOC to delay the bidding process given the size of the transaction and global market uncertainty. (Additional reporting by Hadeel Al Sayegh and Dahlia Nehme; Editing by Jan Harvey)


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