Canadian investors buy into Abu Dhabi pipe

Gary Park

for Petroleum News

Two of Canada’s largest institutional investors have taken a controversial step by joining a consortium to buy a US$10 billion stake in an Abu Dhabi-based natural gas pipeline network in the United Arab Emirates.

The transaction involves other partners in New York, Singapore, South Korea and Italy in a joint venture called ADNOC Gas Pipeline Assets, which will have 20-year lease rights to 38 pipelines covering a total of 600 miles.

The consortium, which will hold 49% of ADNOC, attracted Toronto-based Brookfield Asset Management (which has C$510 billion of assets under management) and the Ontario Teachers’ Pension Plan (with net assets of C$207 billion).

Brookfield Chief Executive Officer Bruce Flatt said the transaction “aligns with our strategy of investing in high quality, essential assets generating stable and predictable cash flows in a sector we know well.”

OTPP Chief Investment Officer Zlad Hindo echoed Flatt’s comments, saying the deal “provides us with a stake in a high-quality infrastructure asset with stable long-term cash flows.”

But Shift Action, a pension advocacy group, said OTPP is exposing the pensions of (an estimated 184,000) Ontario teachers “to climate-related financial risk” and undermining action on climate change “by locking in a polluting infrastructure for decades to come.”

In line with the arguments of many teachers, Shift Action said OTPP is now taking a stake “in a massive piece of fossil fuel infrastructure in the midst of a worsening climate crisis and a volatile disruption to global energy markets.”

The advocacy group said OTPP excludes investments in tobacco companies, guns and arms manufacturers and weapons producers, but has “not yet disclosed exclusions on investments in fossil fuels.”

Neither OTPP nor Brookfield disclosed their percentage share of the ADHOC stake, but both are sitting on record amounts of committed capital to invest. They did not react to the Shift Action criticism.

- GARY PARK