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Brookfield and Teachers pension part of consortium in US$10 billion Abu Dhabi pipeline deal.
Two large Canadian institutional investors, Brookfield Asset Management and the Ontario Teachers’ Pension Plan, are part of a consortium paying US$10.1 billion for a 49 per cent stake in a pipeline subsidiary of the Abu Dhabi National Oil Company in the largest infrastructure deal in the world this year.
The newly created subsidiary will have lease rights to 38 pipelines covering a total of 982.3 kilometres for 20 years, in return for a volume-based tariff. ADNOC will hold the remaining 51 per cent of the subsidiary, and will be responsible for management of pipeline operations and for all associated operational and capital expenditures.
“This strategic transaction is attractive to Ontario Teachers’ as it provides us with a stake in a high-quality infrastructure asset with stable long-term cash flows,” said Ziad Hindo, chief investment officer at Teachers.
“This new partnership with ADNOC and a group of world-class institutional and infrastructure investors expands our global presence and provides further geographic diversification to our portfolio,” he added.
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Bruce Flatt, chief executive of Brookfield, said the pipeline system was an attractive investment for the Toronto-based asset manager because it provides a “critical link” between the United Arab Emirates’ low-cost natural gas supply and “robust in-country” demand.
He added that ADNOC has established an exemplary operational record.
“We look forward to partnering with them in support of this critical asset and sector,” Flatt said in a statement.
The investing consortium includes Global Infrastructure Partners (GIP), Singapore’s sovereign wealth fund GIC, NH Investment & Securities, and Italian energy infrastructure operator Snam SpA.
Additional investors were interested in the assets, according to media reports, but some, such as an Australian fund manager, dropped out earlier in the process, Bloomberg News reported in April.