There are subtle, yet dramatic shifts taking place within the hydrocarbon world, with state-owned and operated pipeline companies reading a greener colored handwriting on the proverbial wall. These shifts, accelerated by privatizations, lower oil prices across the board, decline in demand for oil products and broad societal concerns over climate change are all reverberating inside the world of oil and gas pipelines. Abu Dhabi of the United Arab Emirates is a case in point, where the giant Abu Dhabi National Oil Company (ADNOC) raised $10 billion this year by selling a stake in its gas pipeline assets to a consortium of investors under a long-term lease agreement. Those investors raised debt through a bridge loan and bonds to back the acquisition.
"Finally clients are moving away from long-term project financing and moving to hard mini-perm loans with a take-out from project bonds which is proving extremely successful because it attracts a wider pool of liquidity," said Barbara Riccardi, regional head for the Middle East corporate and investment banking business.
"That is something we really want to push on," she said, adding that similar deals aimed at monetizing oil assets are expected from Saudi Arabia and maybe Oman too."
Saudi Aramco has been in talks with BlackRock and other investors on a planned deal worth over $10 billion to sell a stake in its pipeline business, sources have previously told Reuters.
Natixis also expects green financing to gain traction in the Middle East, with Saudi Arabia and the United Arab Emirates driving the push, Riccardi said. "We see a large pipeline of opportunities from Saudi," she said.
Add to this a mega green hydrogen project in Saudi Arabia: this summer, a large US gas company, Air Products & Chemicals, announced that as part of Neom -- an entirely new city being built near Jeddah -- it has been building a green hydrogen plant for the past four years. The plant is powered by four gigawatts of electricity from wind and solar projects that sprawl across the desert. It claims to be the world’s largest green hydrogen project – and more Saudi plants are on the drawing board.