Adnoc’s $15 Billion Gas Pipeline Draws BlackRock, GIP Interest

Global Infrastructure Partners and KKR & Co. are among suitors considering bidding for a stake in natural gas pipelines being sold by Abu Dhabi’s state-owned energy giant, people familiar with the matter said.

Australia’s IFM Investors Pty and Ontario Teachers’ Pension Plan are also weighing offers for a stake in Abu Dhabi National Oil Co.’s gas pipeline unit, according to the people. A deal could value the business at as much as $15 billion including debt, the people said, asking not to be identified because the information is private.

The oil giant expects to receive first-round bids in mid-February, the people said. Adnoc is seeking to sell as much as 49% of the business through a lease structure, according to the people.

Abu Dhabi, the capital of the United Arab Emirates, is among Persian Gulf oil producers that are opening up their operations to outside investment to attract fresh capital and diversify their economies. Adnoc has raised billions of dollars by bringing in partners for businesses including its refining unit and drilling business.

No final decisions have been made, and there’s no certainty the companies will proceed with firm offers for a stake in the Adnoc gas pipelines, the people said. Representatives for Adnoc, BlackRock, KKR and Ontario Teachers declined to comment. Representatives for IFM and GIP didn’t immediately respond to requests for comment.

KKR and BlackRock agreed last year to invest $4 billion in Abu Dhabi’s oil pipelines, securing two decades of guaranteed returns. The deal was the first investment by foreign asset managers in the infrastructure of a Middle Eastern government-owned oil producer. Singapore sovereign wealth fund GIC Pte also invested in the business later.



Saipem Considering Merger Deal With Rival Subsea 7

Saipem SpA is considering a combination with rival Subsea 7 SA in what could rank as one of the European oil services industry’s biggest-ever deals, people with knowledge of the matter said. Such a merger would create the fourth-largest oilfield service company, after Schlumberger, Halliburton and Baker Hughes.

The Italian company is pursuing a potential transaction with Norway-listed Subsea 7 as it seeks to bulk up and weather an industry downturn, according to the people, who asked not to be identified because the information is private. Subsea 7, which has a market value of about $3.3 billion, rose as much as 8.4% in Oslo trading Friday for the biggest advance in more than two years. Saipem jumped as much as 5.3%. Both companies later pared their gains. Saipem isn’t the only company from the Italian energy industry seeking growth abroad. This year, Eni and OMV AG acquired a $5.8 billion stake in Abu Dhabi National Oil Co.’s refining unit. Since 2000, Eni has racked up 10 acquisitions each worth at least $1 billion.

By combining with Saipem, Subsea 7 would also get exposure to onshore engineering and construction, where Saipem has a solid track record in the petrochemical and liquefied natural gas industries, thus reducing dependence on upstream oil and gas activities. Furthermore, Saipem has a legacy name in the Middle East and many contracts in this booming market. With this move, the merged entity could fight McDermott for the leading role in the oilfield services segment in the region.