Abu Dhabi fund part of lawsuit against Norway government

  • Share via facebook
  • Tweet this
  • Bookmark and Share
(Getty images - Photo for illustraive purpose only)

(Getty images - Photo for illustraive purpose only)

Abu Dhabi is part of a group of investors in Norway's offshore gas pipeline system who have filed lawsuits against the Oslo government over a plan to reduce tariffs for using the network, a move which would dramatically reduce the estimated return on investment.

Companies representing several international investment funds, such as the Abu Dhabi Investment Authority, the Canadian Pension Fund and German insurer Allianz, have spent $5.1 billion in recent years acquiring stakes in Norwegian pipelines, then considered a solid investment bet.

The government said at the end of June it would stick to an earlier announced plan to lower the tariffs by 90 percent for new gas contracts, a move it said was intended to encourage higher production in mature fields and exploration in the frontier areas of the Arctic.

However, the move will lower investors return to 4 percent, when the group had projected a minimum return of 7 percent, and result in the income investors’ expected to make dropping by around $6.5bn.

Infinity Investments SA, a unit of the Abu Dhabi Investment Authority, is part of the investors in Solveig Gas Norway AS, which owns 24.8 percent of Gassled.

“We’re looking forward to getting this tried in the legal system,” Solveig CEO Trygve Pedersen told Bloomberg by phone this week. The tariff cuts are “without legal foundation and should be declared invalid with any resulting loss compensated,” Solveig added in the statement.

Njord Gas Infrastructure AS, which is owned by the UBS International Infrastructure Fund and CDC Infrastructure SA, also filed suits January 16, along with three other investors in the project.

The investors together hold almost 39 percent of Gassled venture. Norway's state-owned Petoro is the major stakeholder with 45.8 percent.

In 2012, Norway overtook Russia to become the European Union's biggest gas supplier, delivering 106 billion cubic metres of gas.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Saudi Arabia's rulers reconsider ties to Wahhabi clergy

Saudi Arabia's rulers reconsider ties to Wahhabi clergy

Ruling family increasingly view the teachings of some of its...

1
Sultan's absence raises worries over Oman succession

Sultan's absence raises worries over Oman succession

Omanis are worried that their childless leader, who is abroad...

1
Jihadi wave tests Tunisia’s young democracy

Jihadi wave tests Tunisia’s young democracy

A major source of fighters in Syria and Iraq, Tunisia’s political...

Most Discussed