The Abu Dhabi National Oil Company (ADNOC) is eyeing a valuation of at least $50 billion for its gas business slated to float this quarter, two sources familiar with the matter said, setting the stage for one of the most highly anticipated stock market listings this year.
The state oil giant announced in November it was combining its gas processing arm and its LNG subsidiary into a single listed entity.
ADNOC is eyeing a valuation of at least $50 billion for ADNOC Gas, though deliberations over valuations have not finalized and the company is yet to determine the size of the offering, said the sources close to the matter, declining to be named as the matter is not public.
They said an initial public offering of ADNOC Gas could launch as soon as February, ahead of a slowdown in market activity during the Muslim fasting month of Ramadan which begins end of March.
ADNOC declined to comment when contacted by Reuters.
The company is sharpening its focus on the gas market as Europe seeks to replace all Russian energy imports as early as mid-2024 after gradual supply cuts since Western sanctions were imposed on the country over its invasion of Ukraine.
At $50 billion and above, ADNOC Gas' valuation would be broadly comparable to Italian energy group Eni, U.S. Refiner Valero Energy and U.S. oil producer Occidental Petroleum.
The expedited time frame led Goldman Sachs and Bank of America to give up their roles as lead managers in the flotation, two other sources said. HSBC has been appointed to work with First Abu Dhabi Bank on the deal, they said.
Companies from the Middle East have raised some $21.9 billion through IPOs in the area in 2022, more than half the total for the wider EMEA region, which also includes Europe and Africa, according to Dealogic data.
ADNOC CEO Sultan al-Jaber is leading its push into new energy, low-carbon fuels such as ammonia and hydrogen, as well as LNG and chemicals incorporated into a new business unit alongside the upstream and downstream businesses.
The firm launched a transformation strategy more than four years ago, including monetizing assets, as part of Abu Dhabi's plans to diversify the economy and attract foreign investment.
Over the past two years, ADNOC listed petrochemicals company Borouge, fertilizers and clean ammonia products maker Fertiglobe and ADNOC Drilling. It is preparing an IPO of its logistics and services unit.
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