Italy’s leading gas infrastructure company, Snam S.p.A., has announced the sale of its minority stake in ADNOC Gas Pipelines to Abu Dhabi-based investment fund Lunate. This strategic move aligns with Snam’s long-term objective to concentrate its operations within Europe and reduce exposure to assets outside key European energy corridors.
Background of the Transaction
In 2020, Snam, in partnership with international investors including Global Infrastructure Partners (GIP), Brookfield Asset Management, and Singapore’s sovereign wealth fund GIC, acquired an indirect stake of approximately 6% in ADNOC Gas Pipelines. The consortium purchased a 49% stake in the pipeline assets, which were valued at $20.7 billion at the time.
ADNOC Gas Pipelines, a subsidiary of the Abu Dhabi National Oil Company (ADNOC), holds lease rights to 38 pipelines covering a total of 982 kilometers across the United Arab Emirates. These pipelines are integral to the transportation of natural gas within the UAE.
Details of the Sale
Snam has agreed to sell its minority stake in ADNOC Gas Pipelines to Lunate, an Abu Dhabi-based investment fund. While the exact financial terms of the transaction have not been disclosed, sources indicate that the sale is expected to result in a capital gain for Snam.
About the Companies Involved
Snam S.p.A.
Founded in 1941, Snam is an Italian energy infrastructure company specializing in natural gas transmission, storage, and regasification. As of December 31, 2023, Snam operated approximately 32,862 kilometers of gas pipelines in Italy, accounting for about 94% of the country’s gas transportation. The company also has a significant presence in Austria, France, Greece, the UAE, and the UK through various associated companies. Snam is committed to the energy transition, investing in sustainable mobility, energy efficiency, and renewable gases such as biomethane and hydrogen.
ADNOC Gas Pipelines
ADNOC Gas Pipelines is a subsidiary of the Abu Dhabi National Oil Company (ADNOC), one of the world’s leading energy producers. The subsidiary manages 38 pipelines spanning 982 kilometers across the UAE, playing a crucial role in the country’s natural gas infrastructure. In 2020, ADNOC sold a 49% stake in its gas pipeline assets to a consortium of international investors, including Snam, GIP, Brookfield Asset Management, and GIC, in a deal valued at $20.7 billion.
Lunate
Lunate is an Abu Dhabi-based alternative investment firm that manages approximately $105 billion in assets. The company invests across private markets, including buyouts, growth equity, venture capital, private credit, real assets, and public equities. In April 2024, Lunate acquired a 40% stake in ADNOC’s oil pipeline infrastructure assets from BlackRock and KKR, further solidifying its presence in the energy sector.
Strategic Implications
Snam’s divestment from ADNOC Gas Pipelines is consistent with its strategy to focus on developing a pan-European multi-molecule infrastructure. By reallocating resources towards European assets, Snam aims to strengthen its role in the continent’s energy transition and enhance the security of supply within key European energy corridors.
For Lunate, the acquisition of Snam’s stake in ADNOC Gas Pipelines represents a strategic investment in the UAE’s critical energy infrastructure. This move aligns with Lunate’s broader investment strategy in the energy sector, as evidenced by its previous acquisition of a 40% stake in ADNOC’s oil pipeline assets.
This transaction underscores the dynamic nature of the global energy sector, with companies continually reassessing their portfolios to align with evolving strategic priorities and market conditions.