KKR, BlackRock Are Set to Invest $4 Billion in Adnoc Pipeline

(Bloomberg) -- KKR & Co. and BlackRock Inc. are set to invest in Abu Dhabi National Oil Co.’s pipeline network in a deal valued at $4 billion to $4.5 billion, according to people familiar with knowledge of the matter.

The deal could be structured so that the two New York-based financial firms acquire leasing rights from the state oil company, the people said, asking not to be identified as the information is private. A transaction could be announced as early as Sunday and the bidders are in talks with banks about financing for the deal, they said.

Adnoc, as the state-owned energy giant is known, KKR and BlackRock declined to comment.

The emirate of Abu Dhabi, home to about 6 percent of the world’s crude reserves, is attempting to generate cash from its prime assets while also attracting more overseas investors as it seeks to diversify an economy that’s dependent on oil. Adnoc has so far listed its distribution unit and made management changes. It also agreed in October to sell a 5 percent stake in its drilling business to Baker Hughes in a transaction that values the unit at about $11 billion.

Eni SpA and Austrian oil and gas producer OMV AG agreed to pay about $5.8 billion for a combined 35 percent stake in Adnoc’s refining unit last month.

The Abu Dhabi government-owned oil giant received an AA long-term credit rating, the region’s highest, from Fitch Ratings this week. Adnoc is OPEC’s third-biggest oil producer and pumps most of the United Arab Emirates’ crude. It earned about as much per barrel as Total SA and Royal Dutch Shell Plc, according to Fitch.

Bloomberg reported Adnoc’s discussions with KKR about the pipeline assets in November. The Financial Times first reported the transaction earlier this week.

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