The investment in VTTI provides the state-owned oil firm access to storage capabilities across some of its key export markets such as Asia, Africa and Europe while securing additional facilities at the UAE’s port of Fujairah, its main storage hub.
Wednesday 07, August 2019 BY KUDAKWASHE MUZORIWA
The Abu Dhabi National Oil Company (ADNOC) has agreed to acquire a 10 per cent stake in VTTI, a Vitol-backed global energy storage company and under the deal, IFM Global Infrastructure Fund as well as Vitol will each own a 45 per cent stake.
ADNOC stated that VTTI is an independent global owner of 15 hydrocarbon storage terminals across 14 different countries and its storage network holds around 60 million barrels of combined storage capacity, much of which is in locations that are complementary to ADNOC’s trade flows.
HE Dr. Sultan Ahmed Al Jaber, the UAE Minister of State and ADNOC Group CEO, said, “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.”
The transaction will enable ADNOC to move closer to its customers, allowing it to be more agile and respond quickly to market needs and dynamics.
In the past couple of years, ADNOC has embarked on a major transformation to become more proactive and adaptive to market changes.
The Abu Dhabi Crude Oil Pipeline, with a capacity of 1.5 million bpd, carries the bulk of the UAE’s crude production to ADNOC’s storage and loading facilities in Fujairah, bypassing the often-troublesome Strait of Hormuz.
In July 2019, Saudi Aramco announced that it expects to complete the expansion of an oil pipeline that runs east-west across the country by September, increasing the amount the Kingdom can ship from the Red Sea and avoid the increasingly tense Strait of Hormuz.