Abu Dhabi National Oil Company (ADNOC) announced, in a statement posted on its site recently, the signing of a “landmark structured financing transaction of up to $11 billion … to monetize Hail and Ghasha’s midstream future gas production”.
In the statement, ADNOC described the non-recourse financing transaction as unique for an energy project of this scale and complexity, adding that it enables ADNOC “to realize upfront value for its products at competitive rates”.
“In addition to providing immediate access to capital, the financing structure introduces an innovative commercial model that ring-fences midstream processing facilities and operations, which enables ADNOC and its partners to raise low-cost funding while retaining strategic and operational control of the assets,” ADNOC said in the statement.
“This financing transaction is the latest in a series of ADNOC-led pioneering infrastructure development partnerships that have been executed over the past decade,” it added.
ADNOC highlighted in the statement that the midstream processing phase of Hail and Ghasha comprises infrastructure for processing, handling, and delivering natural gas, condensate, and natural gas liquids. The company stated that, under the financing structure, ADNOC and its partners “commit to supply the outlined natural gas products through the midstream processing facilities, ensuring long term product flows that underpin the financing framework”.
The company said the bank consortium includes Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Agricultural Bank of China, Bank of China, Citibank, The Development Bank of Singapore, Dubai Islamic Bank, Emirates Development Bank, Emirates NBD, First Abu Dhabi Bank, Gulf International Bank, Industrial and Commercial Bank of China, Mashreq Bank, Mizuho Bank, MUFG Bank, Natixis, National Bank of Kuwait, Sharjah Islamic Bank, Sumitomo Mitsui Banking Corporation, Saudi National Bank, and Standard Chartered Bank.
“This landmark transaction builds on ADNOC’s successful track record of global energy partnerships and unlocks capital to drive progress at Hail and Ghasha, one of the world’s most ambitious offshore gas projects,” Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, said in the statement.
“The exceptional demand from over 20 leading global and regional financial institutions reinforces confidence in ADNOC’s value creation strategy, innovative approach to financing, and expertise in delivering mega projects,” he added.
“Hail and Ghasha is an important contributor to ADNOC’s gas strategy and is on track to generate significant value for ADNOC, our partners, and the UAE, while unlocking important new gas resources for our customers,” he continued.
ADNOC said in its statement that its latest financing model “follows a series of landmark midstream and infrastructure transactions”. The company outlined that that these include a $4.9 billion oil pipeline partnership and a $10.1 billion gas pipeline agreement “with some of the world’s leading global infrastructure and institutional investors”, as well as “pioneering build-own-operate-transfer (BOOT) projects such as the $3.8 billion … project to power and decarbonize offshore operations and the $2.2 billion … project to deliver sustainable water supplies to onshore operations”.
ADNOC went on to state that the “innovative financing structure for Hail and Ghasha offers a replicable model for large-scale greenfield projects”.
“The transaction is anchored by ADNOC’s reliability as an upstream developer and long-term offtaker, as well as its efficient capital management and innovative financing track record,” it said.
“It also provides financiers with robust long-term cash flows from high-quality assets, supported by strong contractual and structural protections,” it continued.
Hail and Ghasha is part of the larger Ghasha Concession, located offshore Abu Dhabi, which is expected to produce 1.8 billion standard cubic feet per day (bscfd) of gas, ADNOC highlighted in its statement.
“It is also the world’s first offshore gas project of its kind that aims to operate with net zero emissions, capturing 1.5 million tons per year (mtpa) of carbon dioxide (CO2), equivalent to removing over 300,000 cars off the road every year,” the company highlighted.
On its site, ADNOC states that the Hail and Ghasha project “will play a vital role in meeting the UAE’s goal of gas self-sufficiency and rising demand for exports”.
In a statement posted on its site on December 19, ADNOC announced that it had signed a $2 billion green financing agreement backed by Korea Trade Insurance Corporation to fund lower carbon projects across its operations.
“The deal reinforces ADNOC’s ambition to integrate sustainable finance into its growth plans,” ADNOC said in that statement.
“This marks ADNOC’s first green financing facility backed by a Korean export credit agency (ECA), following a $3 billion … transaction with the Japan Bank for International Cooperation (JBIC) in 2024,” it added.
“Together, these deals bring ADNOC’s total green funding to $5 billion … in just 18 months, strengthening its track record in green finance,” it continued.
To contact the author, email andreas.exarheas@rigzone.com
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