The Abu Dhabi National Oil Company announced a strategic investment in global storage terminal owner and operator VTTI BV (VTTI). As part of this agreement, ADNOC will acquire a 10% equity stake in VTTI. Following the transaction, VTTI will be owned 10% by ADNOC, 45% by IFM Global Infrastructure Fund (IFM GIF), an investment vehicle managed by IFM Investors, and 45% by Vitol (both directly and through Vitol Investment Partnership II Ltd, an investment vehicle sponsored and managed by Vitol).
VTTI is an independent global owner of 15 hydrocarbon storage terminals across 14 different countries. The VTTI storage network holds around 60 million barrels (9.5 million m3) of combined storage capacity, much of which is in locations that are complementary to ADNOC’s trade flows.
The investment in VTTI provides ADNOC access to storage capabilities across some of its key export markets such as Asia, Africa and Europe while also securing additional facilities at the port of Fujairah, UAE, its main storage hub. This transaction also significantly contributes to the development and growth of ADNOC’s global marketing, supply and trading platforms, providing greater access to knowledge and capabilities that will further enable ADNOC’s growth plans.
H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “We are delighted to be entering into this strategic investment opportunity in VTTI, alongside Vitol and IFM GIF, which will further complement the development of ADNOC’s integrated global trading platform while also delivering a solid financial return. VTTI’s diverse portfolio of storage assets across key target markets such as Asia, Africa and Europe, provides us with direct access to our customers around the world, a key building block to accelerating ADNOC’s transformation into a more integrated and commercially-minded global energy player.”
He added: “As one of Fujairah’s largest storage operators, VTTI is a natural partner for ADNOC. This investment further strengthens ADNOC’s strategic position in Fujairah and supports the continued development of Fujairah as a strategic hub for our operations.”
By expanding its international storage capabilities and reach, ADNOC will move closer to its customers, allowing it to be more agile and respond quickly to market needs and dynamics. It will also unlock incremental revenue, margin and cost saving opportunities from the trading, transportation and storage of its products, giving ADNOC better control over where, when and how its products are being supplied to key markets and customers.
Rob Nijst, CEO VTTI said: “This exciting development is testament to the professionalism and dedication of our VTTI colleagues. Since VTTI was founded 13 years ago, we have worked tirelessly to build a market-leading hydrocarbon storage company, capable of delivering the highest standards of service in key strategic locations. We are very pleased to have ADNOC as our new shareholder and look forward to benefiting from their regional expertise, working together to further grow our global network of terminals and supporting ADNOC’s trading and supply ambitions.”
Today’s announcement comes just days after ADNOC confirmed the successful closing of its refining and trading agreements with ENI and OMV, under which a new trading joint venture, ADNOC Global Trading, has been established. This will focus predominantly on the trading of products from ADNOC Refining.
In February 2019, ADNOC announced that it is building the world’s largest single underground project for oil storage, with a capacity of 42 million barrels of crude oil, in the Emirate of Fujairah on the eastern coast of the UAE. Combined with ADNOC’s existing 8 million barrels of storage in Fujairah, the ADNOC Fujairah Underground Storage Facility will strengthen the UAE’s position as a reliable supplier of crude oil as well as give ADNOC greater flexibility, allowing it to manage and optimize its delivery schedule and support its broader growth in trading. This strategic investment builds on ADNOC’s existing storage and export facilities in Fujairah and will enhance its position as one of the key trading and supply players in Fujairah’s growth as a global oil and products storage and trading hub.
Over the last two years, ADNOC has significantly expanded its strategic partnership and co-investment model and created new investment opportunities across all areas of its value chain, while, at the same time, more proactively managing its portfolio of assets and deployment of capital. This transaction further demonstrates this strategy and follows on from other recent value creation initiatives, including ADNOC’s debut capital markets transaction, the issuance of the Abu Dhabi Crude Oil Pipeline (ADCOP) bond, the IPO of ADNOC Distribution, the strategic partnerships between ADNOC Drilling and Baker Hughes, and between ADNOC, Eni and OMV in refining and trading, and the recent partnership between ADNOC Fertilizers and OCI.
VTTI will continue to be managed by an independent management team led by CEO Rob Nijst.
ADNOC is a major diversified group of energy and petrochemical companies that produces about 3 million barrels of oil and 10.5 billion cubic feet of raw gas a day. Its integrated upstream, midstream and downstream activities are carried out by 14 specialist subsidiary and joint venture companies.
To find out more visit: www.adnoc.ae
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VTTI is a fast-growing independent provider of hydrocarbon storage worldwide. Founded in 2006, the company holds 9.5 million m3 of combined storage capacity across five continents, which is expected to rise to over 10 million m3 in the near future as new projects come on-line. VTTI has grown rapidly by both building brand new assets on greenfield sites, and by acquiring existing businesses and aligning them to VTTI’s technical and HSE standards. It is the second largest terminal operator in Fujairah.
Vitol is an energy and commodities company; its primary business is the trading and distribution of energy products globally – it trades 7.4 million barrels per day of crude oil and products and, at any time, has 250 ships transporting its cargoes.
Vitol’s clients include national oil companies, multinationals, leading industrial and chemical companies and the world’s largest airlines. Founded in Rotterdam in 1966, today Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally including: circa 16mm3 of storage globally, 480kbpd of refining capacity and 6,500 service stations across Africa, Australia, Brazil, Eurasia and in Northwest Europe. Revenues in 2018 were $231 billion.
About IFM Investors
IFM Investors is a global institutional funds manager with $98 billion under its management as of 30 June 2019. Established more than 20 years ago and owned by 27 Australian pension funds, IFM Investors’ interests are deeply aligned with those of its investors. Investment teams in Australia, Europe, North America and Asia manage institutional strategies across infrastructure, debt investments, listed equities and private equity. IFM Investors has offices in nine cities: Melbourne, Sydney, London, New York, Berlin, Tokyo, Hong Kong, Seoul and Zurich. For more information visit: www.ifminvestors.com.