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December 23, 2019

Milbank Advises on PFI’s 2019 Middle East Infrastructure Deal of the Year, $4B Project Beyond

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Milbank LLP’s Global Project, Energy & Infrastructure Finance partners Matthew Hagopian and Manzer Ijaz and Global Corporate partner Stuart Harray led the team involved in the groundbreaking and precedent-setting Project Beyond, which was named Infrastructure Deal of the Year – Middle East Awards 2019 by Project Finance International (PFI). The team advised BlackRock and KKR on their landmark partnership with Abu Dhabi National Oil Company (ADNOC) in connection with a $4 billion midstream pipeline infrastructure agreement. The agreement forms a new entity called ADNOC Oil Pipelines, with BlackRock and KKR acquiring a 40% stake and ADNOC retaining a 60% majority stake.

PFI noted: “Project Beyond, the sale of a 40% stake in 18 Abu Dhabi National Oil Company (ADNOC) pipelines, is the first of what promises to be a series of midstream pipeline infrastructure sales in Abu Dhabi as the Emirate seeks to raise money to invest in new industries.”

The transaction was also named International Financial Law Review’s (IFLR) Middle East M&A 2019 Deal of Year at the awards ceremony in October 2019. IFLR’s accolade reads: “This transaction opens a new frontier in the market. The deal consisted in funds, managed by BlackRock and KKR, forming a consortium to acquire a 40% interest in ADNOC Oil Pipelines, with ADNOC holding the remaining 60%. ADNOC Oil Pipelines is a newly formed entity (SPV) that will lease ADNOC’s interest in 18 pipelines for a 23-year period. The entity will, in turn, receive a tariff payable by ADNOC for its share of volume of crude and condensate flowing through the pipelines, backed by minimum volume commitments. ADNOC retains the sovereignty over and management of the pipelines, while the transaction provides ADNOC with upfront proceeds of $4 billion. The agreements are UAE law governed, which entailed complex structuring between the three parties. The transaction establishes a type of sale and lease back arrangement that could appear elsewhere in the region and in other sectors.”