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Abu Dhabi Funds Invest $2.1 Billion in ADNOC Gas Pipelines

Abu Dhabi Funds Invest $2.1 Billion in ADNOC Gas Pipelines
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Abu Dhabi Funds Invest $2.1 Billion in ADNOC Gas Pipelines

Abu Dhabi Funds Invest $2.1 Billion in ADNOC Gas Pipelines

The Abu Dhabi National Oil Company, ADNOC, announced today that Abu Dhabi Pension Fund, ADPF, and ADQ, one of the region’s largest holding companies, will invest AED7.7 billion (US$2.1 billion) into ADNOC gas pipeline infrastructure assets.

Under the terms of the agreement, ADNOC will divest 20% in ADNOC Gas Pipelines HoldCo LLC, a wholly owned ADNOC entity that holds 100% of ADNOC’s interest in ADNOC Gas Pipeline Assets LLC (ADNOC Gas Pipelines), to ADPF and ADQ.

ADNOC Gas Pipelines is a subsidiary of ADNOC with lease rights to 38 gas pipelines covering a total of 982 kilometers.

In July 2020, a consortium of global investors, comprising Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities and Snam (the Consortium), invested $10.1 billion for a collective 49% stake in the same select ADNOC gas pipeline infrastructure assets, state news agency WAM reported.

For his part, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO welcomed the partnership with both Abu Dhabi Pension Fund and ADQ.

"Joining our global investor consortium partners in this landmark energy infrastructure investment, the addition of these high-caliber UAE investors sets a new benchmark for leading global and domestic institutional investors to deploy long-term equity capital into key ADNOC energy infrastructure assets," said Sultan Al Jaber.

Also, Khalaf Abdullah Rahma Al Hammadi, Director General of Abu Dhabi Pension Fund said: "The Fund is keen to implement the directives of the UAE’s wise leadership and achieve the Abu Dhabi government's vision aimed at building strong partnerships between major national institutions to support the national economy and achieve the highest possible benefits."

Since announcing the expansion of its partnership and investment model and the more proactive value management of its assets and capital in 2017, ADNOC has entered the debt capital markets for the first time, issuing a $3 billion bond backed by the Abu Dhabi Crude Oil Pipeline.

ADNOC also recently closed innovative investment partnerships with leading global institutional investors and operators in both its oil and gas pipelines and non-oil and gas strategic infrastructure.

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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
TT
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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.