InfraNews Case Study: Multicurrency Programme Sets a Precedent for Infra Investors in Norway’s Gassled

The NOK3.8bn (EUR477.8m) of sterling, dollar and kroner bonds that a venture between UBS International Infrastructure Fund and CDC Infrastructure issued in the second half of June to finance its acquisition of an 8% stake in Gassled has established a template for other recent financial investors in Norway’s offshore gas pipeline company to follow.

Further bond issues to provide acquisition finance for shares in the company that ships a quarter of all Europe’s gas imports should go ahead in the coming months, now that that the Njord Gas Infrastructure (NGI), venture has completed the deal it originally struck back in April 2010 to acquire the ExxonMobil stake in Gassled (9.4% at the time, but subsequently reduced to 8.03% at the beginning of this year in line with an agreement made at the time Gassled was set up in 2003).

The delay in closing the deal was largely down to the time it took the relevant Norwegian government ministries (the Ministry of Petroleum and Energy, and Ministry of Finance) to approve the first transaction that involved one of Gassled’s founding partners selling its interest to a third party.

Original Owners Seek an Exit
Final approval from the ministries did not come through until February – several months later than expected – but since then two other members of the original Gassled owner consortium have also sold out to financial investors, as the rationale for oil and gas operators in the Norwegian Continental Shelf to own the transport infrastructure has disappeared. When Gassled was established, ownership conferred preferential access to its pipeline capacity. But subsequent changes to the regulatory regime now guarantee equal third-party access to all operators in the Norwegian sector, while the returns on the regulated monopoly business are well below those that the operators can achieve on upstream investments.

By far the bigger of the two more recent deals saw Norway’s mostly state-owned operator Statoil sell a 24.1% stake (all but 5% of its holding) in Gassled to a consortium of the Abu Dhabi Investment Authority (ADIA), the Canada Pension Plan Investment Board (CPPIB), and Germany’s Allianz Capital Partners for NOK17.35bn (EUR2.24bn) in the first week of June.

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