The Abu Dhabi National Oil Company (ADNOC) has 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 cubic metres) 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.
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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.
“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.”
This move will 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.
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.
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