Adnoc buys into VTTI

GOING GLOCAL

CHINA • ADNOC HAS TAKEN A STAKE IN VTTI, STRENGTHENING THE POSITION OF FUJAIRAH AND PROVIDING IT WITH BETTER ACCESS TO ITS CUSTOMERS AROUND THE WORLD

THE ABU DHABI National Oil Company (ADNOC) has taken a 10 per cent stake in VTTI, acquiring 5 per cent from each of its 50/50 partners, Vitol and IFM Global Infrastructure Fund. The investment in VTTI provides ADNOC access to storage capabilities across some of its key export markets in Asia, Africa and Europe, while also securing additional facilities at the port of Fujairah, UAE, its main storage hub. 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.

BOTH VTTI AND ADNOC HAVE FOCUSED INVESTMENT

IN DEVELOPING PROCESSING AND STORAGE

“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,” says HE Dr Sultan Ahmed Al Jaber, ADNOC Group CEO and UAE Minister of State. “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 acquisition followed hard on the heels of the signing of a refining and trading agreement between ADNOC and ENI and OMV, and the establishment of a joint venture, ADNOC Global Trading, that will focus mainly on marketing and trading products from ADNOC Refining. PLACE IN THE WORLD VTTI will continue to be managed by an independent management team led by CEO Rob Nijst, who says: “This exciting development is testament to the professionalism and dedication of our VTTI colleagues. Since VTTI was founded 13 years ago, we have worked tirelessly to build a market-leading hydrocarbon storage company, capable of delivering the highest standards of service in key strategic locations. We are very pleased to have ADNOC as our new shareholder and look forward to benefiting from their regional expertise, working together to further grow our global network of terminals and supporting ADNOC’s trading and supply ambitions.”

VTTI’s 50/50 ownership structure was created in November 2018 when IFM Investors acquired Buckeye Partners’ 50 per cent holding.

This past February, ADNOC announced the construction of the world’s largest underground crude oil storage cavern in Fujairah, which will have a capacity of 42m bbl. Combined with its existing 8m bbl of storage in the port, access to VTTI FTL, a 1.6m-m³ tank storage facility and 80,000 bpd oil refinery in Fujairah, will strengthen the UAE’s position as a reliable supplier of crude oil and give ADNOC greater flexibility, allowing it to manage and optimise its delivery schedule and support its broader growth in trading.

“As one of Fujairah’s largest storage operators, VTTI is a natural partner for ADNOC,” says HE Dr Al Jaber. “This investment further strengthens ADNOC’s strategic position in Fujairah and supports the continued development of Fujairah as a strategic hub for our operations.”

VTTI currently has ownership interests in 15 storage facility in 14 countries around the world, with a combined capacity of 60m bbl (9.5m m³). Buying into this network will move ADNOC closer to its customers, allowing it to be more agile and respond quickly to market needs and dynamics. It is also expected to unlock incremental revenue, margin and cost saving opportunities from the trading, transport and storage of its products, giving ADNOC better control over where, when and how its products are being supplied to key markets and customers. HCB www.vtti.com