In a world dominated by bad news and the ever-present danger of energy supply not meeting demand, the nations in the Middle East have become a solid investment for energy companies and investment firms alike. Now it has emerged that KKR, a leading global investment firm with operations all over the globe, has purchased a stake in ADNOC’s gas pipelines as part of its broader push to increase investments in the Middle East region. The United Arab Emirates is among the nations in the region searching for foreign investors in its energy sector.
KKR is broadening its Middle Eastern portfolio to offer substantial returns on investments for its stakeholders
For any company, regardless of what sector it operates in, securing long-term revenue returns for investors and stakeholders is essential. For many large companies, finding the right investment can be tricky, to say the least.
In today’s economy, markets are fluctuating like a preteen’s hormones, and one can never be sure of how the market might react to daily happenings. However, investing in midstream infrastructure can easily be seen as a safe bet among the litany of possible investments. And global investment firm KKR has opted to boost its Middle Eastern portfolio and has acquired a minority stake in the Abu Dhabi National Oil Company (ADNOC) gas pipeline assets.
KKR is planning an expansion of its Middle East assets and operations
KKR has a vast portfolio that spans the length and breadth of the world, and by acquiring a stake in the exceedingly large ADNOC pipeline, the company is building on its already established relationship with the United Arab Emirates. The company launched a purchasing platform way back in 2008 and has global assets in the billions of dollars.
KKR has established a dedicated Middle East investment team to boost operations in the region
What can be said for certain is that the Middle East will continue to play an essential role in the global gas sector for many years to come. And the safe bet of a sustainable investment in the region alleviates fears over the recent state of the international energy sector. KKR has acquired a stake in the ADNOC Gas Pipeline asset that operates over 37 pipelines and two export terminals across the UAE.
ADNOC will retain operational rights, while KKR is simply jumping on board, awaiting a long-term return on its investment. The new deal builds on a previous acquisition in 2019, where KKR partnered with ADNOC and BlackRock on a pipeline deal, although BlackRock has since divested its stake.
“This investment reflects KKR’s commitment to expand partnerships and investment across the Middle East. The region’s strong fundamentals, bold vision, and focused leadership offer increasingly attractive opportunities for global investors.” – David Petraeus, Partner at KKR and Chairman of KKR Middle East and the KKR Global Institute
The deal underscores the importance of non-Russian gas assets as the world has imposed new sanctions on Russian gas and oil, leading to a substantial shake-up of the energy market. The EU is preparing to eliminate Russian gas and LNG imports by the end of 2027.
With the end of the Russian energy sector’s dominance, other energy-rich nations need to step up their game
The reality of the energy market at the moment is that the end of the dominance of Russia on the sector is at hand, and that other energy-producing nations like the UAE will no doubt see an increase in demand as the world enters a new horizon without Russian energy in all its forms. With the latest round of sanctions on Russia coming into effect, the impact on several nations that used to rely on Mother Russia for energy resources like gas and oil has been immense and immediate.
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