On Wednesday, in a bid to contribute towards its expansion into oil trading and its transformational drive, the state-run UAE energy business, Abu Dhabi National Oil Co (ADNOC) announced the acquisition of a stake in VTTI, a global energy storage company backed by Vitol.
According to sources closely following the matter, VTTI and ADNOC have agreed upon terms for the latter to acquire a 10% stake in the global energy storage company backed by Vitol.
Furthermore, sources also revealed that this will enable the state-run UAE business to store all its raw materials at the port of Fujairah, a storage facility and regional bunkering in the United Arab Emirates, and also in exports markets all over the world in which VTTI have storage facilities available.
The remaining 90% stakes in VTTI will reportedly be evenly distributed between IFM Global Infrastructure Fund, an investment vehicle managed by IFM Investors and Vitol, meaning both parties will own a 45% stake in the business.
A brief translation of Sultan al-Jaber, the Chief Executive of ADNOC, regarding the deal reads as follows, “The stakes acquired in VTTI, will help us(ADNOC) in our plans of further improving our integrated global trading platform. ADNOC will also be able to deliver a solid financial return through this deal.
Based out of UAE, ADNOC is reportedly on the verge of building the largest single underground project for storage of oil which the world has not seen yet, this project will reportedly have a capacity of 42 million barrels of crude oil. In recent years, ADNOC has come to be known as the Gulf region’s most conservative energy firm. ADNOC has come up with a very dynamic approach for pursuing its plan to transform into a proactive company which is flexible according to market demands.
The storage network of VTTI can hold a combined storage capacity of an impressive 60 million barrels. VTTI also owns 15 terminals that are situated at major hubs in Asia, Africa, Netherlands, the United States amongst a total of 14 countries.